Government in court over pension protection

27 June 2003
One of the UK's biggest trade unions, Amicus, is taking the government to court over lost pensions.

Amicus insists that it will take a case to the European Court of Justice on behalf of its members who worked at United Engineering Forgings (UEF) in Bromsgrove and at Allied Steel & Wire (ASW) in Cardiff.

Many workers for the two companies lost around 90 per cent of their pensions when their employers went bust and they discovered the company pension fund was in deficit.

The union is expected to claim in court that the British Government in the early 1980's failed to implement a EU Directive by 1983 that protects employees pension funds when companies go into receivership.

The union believes that the Government's failure to properly implement the directive has left members at companies such as ASW and UEF facing a retirement in poverty despite following advice to save for their retirement through their company pension schemes.

Amicus Joint General Secretary, Derek Simpson, commented, "Workers in companies such as UEF and ASW are facing massive pension shortfalls and although the government's pensions green paper takes Amicus' advice to have an insurance scheme to provide protection in the future, it means nothing to those people already facing poverty in retirement.'

"At the moment, when an employer becomes insolvent the pension scheme in place is wound up. If there is a deficit in the pension scheme, members have little chance of getting the pension they're entitled to.'"

The Government announced earlier this month that companies would be required to pay into a pension protection fund that would insure the value of a company's pension fund if the firm become insolvent.

If the case is successful a raft of similar claims are expected to come forward.