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EU Court of Justice Finds that Ireland Must Protect Pension Benefits in Bankruptcy

The EU Court of Justice held that Directive 2008/94/EC of the European Parliament and of the Council of 22 October 2008 (?Ç£Directive 2008/94?Ç¥) applies to pension benefits under a supplementary pension scheme, regardless of the cause of the employer?ÇÖs insolvency, and without taking into account state pension benefits. Directive 2008/94 provides that member states must protect the pension interests of retirees when an employer becomes insolvent. In prior cases, the EU Court of Justice held that, while a member state need not guarantee 100 percent of the pension benefit, a guarantee of less than 50 percent is insufficient. In the case before the court, a crystal manufacturer (the ?Ç£Employer?Ç¥) in Waterford, Ireland, entered into bankruptcy. The Employer?ÇÖs defined benefit pension scheme was severely underfunded and could cover only between 18 percent and 28 percent of the liabilities. A group of employees sued the Irish Minister for Social and Family Affairs… Continue Reading

May 2013
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