The Court of Appeal has ordered a reference to the Court of Justice of the European Union (ECJ) in Grenville Holden Hampshire v the Board of the Pension Protection Fund which involves a pension scheme member, whose early retirement pension was reduced by two-thirds on the scheme's entry to the PPF, arguing that the statutory cap on compensation payable by the PPF does not give full effect to Article 8 of the EU Insolvency Directive.
Article 8 of the EU Insolvency Directive requires national governments to take "necessary measures" to protect the interests of employees and former employees in relation to immediate or prospective rights under occupational pension schemes. The member sought to rely on the ECJ decisions in Robins and Hogan, which, on the members' interpretation, required UK legislation to ensure that every individual employee of every scheme receives a minimum of 50% of their scheme benefits in the event of their employer's insolvency.
The High Court ruled against the member, the view being that the relevant passage in Hogan should not be taken literally. However, the Court of Appeal ruled that the ECJ had "meant what it said" in Hogan and that the PPF compensation cap had not "correctly or adequately transposed the provisions of Article 8 into domestic law". Noting that the point was "not, however, entirely free from doubt", the matter was referred to the ECJ.