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EU high court rules British pension guarantee funds are insufficient

EU high court rules British pension guarantee funds are insufficient

Britain has failed to meet European Union standards for protecting workers from losing their pensions when their employer goes bankrupt, the EU's highest court ruled Thursday.
While the EU member states are not obliged to reimburse workers for benefits they had paid under schemes run by companies that go out of business, they must ensure the pensions are sufficiently protected, the Luxembourg-based European Court of Justice ruled.
The case was referred to the court by the British High Court, after employees of the company ASW Limited, a steel products company which went into liquidation in April 2003, sued over lost benefits, the court said. Two of the claimants will receive only 20 and 49 percent, respectively, of their pensions.
"A system that may, in certain cases, lead to a guarantee of benefits limited to 20 or 49 percent of the expected entitlement cannot be considered to fall within the definition of the word 'protect'," the court ruling said.