Section 14: No forfeiture on bankruptcy of rights under pension schemes
Currently, where a person becomes bankrupt, occupational pension schemes (approved and unapproved) commonly protect the person’s benefits by means of forfeiture arrangements. The member’s benefits are forfeit to the scheme, which can then pay them on a discretionary basis to the member or his family.
If these arrangements were left untouched it would defeat the policy of sections 11 and 12 to protect pension benefits from creditors only in accordance with those sections. That would tilt the balance against the interests of creditors. Consequently, this section provides that pension schemes of all kinds will no longer be able to forfeit pension rights on a member’s bankruptcy.
