Olympic Airlines – Government exploring PPF amendments

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Steve Webb has confirmed that the Government is “actively exploring” if it can amend the Pension Protection Fund (PPF) legislation in regard to employer insolvency, in order to allow members of the Olympic Airlines pension scheme to qualify for PPF compensation.

Steve Webb’s House of Commons written answer, follows a Court of Appeal decision in June 2013. The decision ruled that Olympic Airlines winding up in England did not amount to “economic activity” within the meaning of Article 3(2) of Council Regulation (EC) 1346/2000 (the Insolvency Regulation).

As foreign liquidations of companies do not count as qualifying insolvency events under section 127 of the Pensions Act 2004, the liquidation of Olympic Airlines did not trigger a PPF assessment period. Consequently, members of the scheme would not be entitled to PPF compensation.

At the time of writing this newsletter, we understand that leave to appeal this case to the Supreme Court has been granted. We will keep you updated on this matter as it progresses