30th April 2018 Anna Rogers comments in Pensions Age on potential unlawfulness of UK pension compensation limit
The UK’s Pension Protection Fund (PPF) might have to rethink its compensation limit if the European Court of Justice (ECJ) decides that it is illegal.
German Advocate General Juliane Kokott stated that individual employees must be entitled to compensation of at least 50% of the total value of their pension in the event of their employer’s insolvency.
If the ECJ were to side with Kokott, the PPF could be forced to drop its annual limit of £35,000.
Anna Rogers said the PPF is likely to still impose a cap, but that it would be a higher one.
She commented further:
“The ECJ is likely to agree with the preliminary ruling and improve the rights of executives with big pensions that are currently subject to swingeing cut-backs when their company goes bust.
“The Advocate General has said that it isn’t fair that the PPF compensation caps ‘establish a kind of general suspicion in respect of senior executives who have not yet attained the pension age… A general presumption of the existence of abuse is unlawful.'”
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