EU law and protection of pension benefits on transfers subject to insolvency proceedings under German national law (EM v TMD Friction, FL v TMD Friction EsCo)

Article summary

Pensions analysis: In TMD Friction, the Court of Justice decided in the context of German national law on the transfer of undertakings subject to insolvency proceedings by the insolvency practitioner. The Acquired Rights Directive does not preclude national law which provides that the transferee is not liable for that portion of transferring employee’s rights under an occupational pension scheme when they become eligible at a later date as corresponded to accruals before the insolvency event, provided that in respect of those rights not transferred, they are protected at a level at least equivalent to the level of protection under the Insolvency Protection Directive 2008 (namely at least half of accrued retirement pension rights).This however is unlikely to have any practical impact on practitioners in respect of UK occupational pension schemes for the reasons set out below. Written by Oliver Hilton, barrister, at Radcliffe Chambers.