UK pension scheme members lose PPF protection

A decision of the Court of Appeal in relation to Olympic Airlines has left UK pension scheme members without the protection of the Pension Protection Fund (PPF).

The case concerned the sponsoring employer (Olympic Airlines) of a defined-benefit UK pension scheme whose main liquidation was taking place in Greece. EU cross-border insolvency proceedings are governed by European Insolvency Regulations. Under those regulations, once insolvency proceedings have commenced in a member state where the company has its centre of main interests (COMI), it is only possible to have secondary insolvency proceedings in another member state if the company has an ‘establishment’ in that other member state.

Olympic Airlines went into liquidation in Greece in 2009. Prior to this, it had employed a team of approximately 30 staff in the UK. However, by 14 July 2010, the company only maintained a London office and employed only two members of staff on an ad-hoc basis, whose employment mainly involved administrative tasks connected with the winding-up…

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