Pension Schemes

Work and Pensions written question – answered on 12th February 2004.

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Photo of Bob Spink Bob Spink Conservative, Castle Point

To ask the Secretary of State for Work and Pensions what protection is afforded to workers who have lost their pension rights after their employer became insolvent under clause 8 of the EU Insolvency Directive.

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

As has been confirmed by the European Commission, we fully meet our obligations under Article 8 of the Insolvency Directive, as successive Governments have done since the Directive was adopted in 1980.

Under the Employment Rights Act 1996 and the Pensions Scheme Act 1993, the Redundancy Payments Directorate, on behalf of the Secretary of State for Trade and Industry, makes insolvency payments from the National Insurance Fund (NIF) to qualifying former employees. The amounts payable from the NIF are subject to statutory upper limits. In addition, the Pensions Act 1995 requires salary-related schemes to meet the Minimum Funding Requirement (MFR), and provides for a statutory priority order for the distribution of a scheme's assets if a scheme that is required to meet the MFR winds up.

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