ECJ raps government over pensions compensation

29 January 2007
Steel workers represented by Amicus who lost three-quarters of their pensions when Allied Steel & Wire collapsed in 2002 are pressuring the government to compensate them after the European Court of Justice ruled that British ministers have made a commitment to do so.

The ruling found the UK government in disregard of EU regulations for protecting pensions rights, which stipulate that governments are bound to compensate workers with up to 50 per cent of their pension value.

The dispute began last year when the parliamentary ombudsman, Ann Abraham, suggested that the government had a responsibility to compensate all workers whose occupational pensions schemes closed down prior to 2004.

The pensions secretary, John Hutton, rejected the claim, and the steel workers' unions took the case to the European Court of Justice.

The Department for Work and Pensions has now revealed that it will challenge the European ruling in the high court.

Government liability for the loss of occupational pensions provision is only legally contested where pensions schemes collapsed before 2004, when the government set up the £20 million Pension Protection Fund (PPF).

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