APW Pensioners Draw a Blank in Brussels - But it Won't Happen Again

4.48.00pm UTC (GMT +0000) Wed 2nd Feb 2005

The EU Commission has ruled out help to the APW employees and pensioners who have lost up to 80 per cent of their expected pensions after the company's US owner closed the scheme, but the situation will not be able to occur again under a new EU law.

Hampshire MEP Chris Huhne pressed the Commission to look at the issue in the light of EU law protecting pensioners, but Employment and Social Affairs Commissioner Vladimir Spidla says that the EU law that dates from 1980 only protects employees and pensioners of companies that become insolvent.

This does not cover APW, where the pension fund agreed to accept only a small contribution from the US parent company so that the ailing company could keep going. The US parent had threatened total closure.

However, the Commissioner confirmed in a parliamentary answer to Mr Huhne that a case like APW will in future be covered under new EU law agreed during the last parliament, but this will not enter into force until 23 September 2005. From that date, EU law requires all pension funds to have "at all times sufficient and appropriate assets" to meet liabilities and that those assets should be entirely separate from the sponsoring company.

"It is a disappointment that the Commission says it cannot help" said Mr Huhne. "But it looks now as if we must redouble our efforts to persuade the British pensions minister, Malcolm Wicks, to ensure that the APW employees and pensioners are supported by the UK Financial Assistance Scheme". Mr Huhne was one of the parliamentarians who met Mr Wicks before Christmas with a delegation of APW staff.

"At least it is some consolation to know that this terrible loophole, through which the APW staff have fallen, has been closed for the future" said Mr Huhne.

"A big part of the APW problem occurred because of the redundancies at the company, which meant that it was receiving fewer contributions. In future, pension schemes should have to reassess their financial standing when major events like redundancies occur" said Mr Huhne.

As a member of the European Parliament's economic and monetary affairs committee, Mr Huhne was one of the MEPs responsible for toughening up the regulation of pension funds in the new EU law, designed to establish a pan-european single market in pension funds.