In the November 2013 edition of Pensions Pieces we referred to the Olympic Airlines case where a UK pension scheme could not qualify for entry to the Pension Protection Fund ('the PPF') because its sponsoring employer was suffering main liquidation proceedings in Greece, and further insolvency proceedings could not be established to satisfy the current entry conditions for the PPF. The ultimate result was that the scheme could not benefit from the protection of the PPF even though it had been paying levies to it.
Following a Parliamentary statement by the Pensions Minister, Steve Webb, that this issue would be addressed, amendments to the regulations which deal with PPF entry conditions take effect from 21 July 2014 but will only last until 21st July 2017, and provide for a new type of insolvency event for PPF entry purposes. This 'European insolvency event' will be triggered five years after an insolvency process is commenced outside the UK but within the EEA on the basis of that country being the centre of main interests under the EU's Regulation on Insolvency Proceedings 2000. These conditions may, eventually, capture some schemes in similar circumstances to the Olympic Airlines scheme but are very resticted and do not address the issue more widely, in particular where the proceedings take place outside the EU but encompass the UK business. As a result, the wider issue of employers being obliged to pay the PPF levy but being, in some circumstances, unable to qualify for PPF entry remains.