The Olympic Airlines case highlighted a major
problem in accessing the Pensions Protection Fund (PPF) for
schemes with an employer based in the EU. The DWP has at
last addressed this issue and is consulting on draft
regulations that are intended to solve the problem.
One of the requirements for entry to the PPF is for all
relevant employers to have suffered an "insolvency
event". It is, in theory, possible, where an employer has
suffered an insolvency event in another EU country, for secondary
insolvency proceedings to be commenced in the UK, thus triggering
PPF entry. However, in Olympic
Airlines, secondary insolvency proceedings were refused
because the company did not have an "establishment" in
the UK. This requires the business to be continuing on a commercial
basis, not merely maintaining an office for the purposes of winding
up the operation (which will often be the case when the
main insolvency proceedings have already been commenced in
the home country).
