Part IX Modification and winding up of schemes
Winding up
F1I1142 Powers of the Board to wind up schemes.
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F1I1143 Winding up of public service schemes.
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I1C1144 Deficiencies in the assets of a scheme on winding up.
F21
If, in the case of an occupational pension scheme which is not a money purchase scheme, the value at the applicable time of the scheme’s liabilities exceeds the value of its assets, then an amount equal to the excess shall be treated as a debt due from the employer to the trustees of the scheme.
2
If—
a
a relevant insolvency event occurs in relation to the employer; and
b
the debt mentioned in subsection (1) has not been discharged at the time that event occurs,
then, for the purposes of the law relating to winding up, bankruptcy or sequestration as it applies in relation to the employer, that debt shall be taken to arise immediately before that time.
3
In this section—
“the applicable time” means—
a
if the scheme is being wound up before a relevant insolvency event occurs in relation to the employer, any time when it is being wound up before such an event occurs; and
b
otherwise, immediately before the relevant insolvency event occurs; and
“the employer” means the employer of persons of the description or category of employment to which the scheme relates.
4
For the purposes of this section a relevant insolvency event occurs in relation to the employer—
a
in England and Wales—
i
where the employer is a company, when it goes into liquidation, within the meaning of section 247(2) of the M1Insolvency Act 1986; or
ii
where the employer is an individual, at the commencement of his bankruptcy, within the meaning of section 278 of that Act; or
b
in Scotland—
i
where the employer is a company, at the commencement of its winding up, within the meaning of section 129 of that Act; or
ii
where the employer is a debtor within the meaning of the M2Bankruptcy (Scotland) Act 1985, on the date of sequestration as defined in section 12(4) of that Act.
5
The value of a scheme’s assets and liabilities for the purposes of subsection (1) shall be determined in accordance with regulations and such regulations may provide that, in calculating the value of the scheme’s liabilities, any provision of the scheme which limits the amount of its liabilities by reference to the amount of its assets is to be disregarded.
6
This section is without prejudice to any other right or remedy which the trustees may have in respect of the deficiency in the scheme’s assets.
7
A debt due by virtue only of this section shall not be regarded—
a
as a preferential debt for the purposes of the M3Insolvency Act 1986, nor
b
as a preferred debt for the purposes of the M4Bankruptcy (Scotland) Act 1985.
8
The provisions of this section and of any regulations made under section 153(5) modifying this section override any provision of a scheme to the extent that it conflicts with this section or those regulations.