EU Court Says UK Pension Safety Net Not Good Enough
The ruling by the EU judges stems from a case brought to
the British courts by the unions representing about 800
workers of Allied Steel and Wire, who saw their pensions
cut when the company filed for bankruptcy in 2002. The
British courts then asked for clarification from the
European Court of Justice about aspects of EU law in the
case.
The EU court said that the EU rules do not guarantee
full pensions in such cases, but the “level of
protection of those rights such as that afforded by the
United Kingdom is inadequate.”
British law does not require that the workers get the
pension benefits they were entitled to, with two of them
receiving only 20% and 49%, respectively of those benefits.
The EU stopped short of requiring that full pension
benefits be paid, but did say that providing half of the
benefits “cannot be considered to fall within the
definition of the word ‘protect’ used in the
directive.”
The European Court of Justice remanded the case
back to the British court to decide whether the government
should cover the shortfall in the Allied Steel and Wire
case.
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