Pension lifeboat funds including the Pension Protection Fund (PPF) cannot be required to pay 100% of benefits, but must ensure members remain above the poverty threshold, the European Court of Justice (ECJ) has said.
In a judgment delivered in Pensions-Sicherungs-Verein VVaG v Günther Bauer this morning (19 December), the court said reductions in benefits paid to former employees due to a company insolvency could be "manifestly disproportionate" if it puts the member below an EU member state's poverty threshold. This is even the case where the member is still receiving half of their pre-insolvency benefits, as dictated by a separate ECJ ruling last year. However, it said "member states have considerable latitude in determining both the means and the level of protection of employees' accrued entitleme...
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