36A Recovery of excessive pension contributions.

1

Where a debtor’s estate has been sequestrated and he—

a

has rights under an approved pension arrangement, or

b

has excluded rights under an unapproved pension arrangement,

the permanent trustee may apply to the court for an order under this section.

2

If the court is satisfied—

a

that the rights under the arrangement are to any extent, and whether directly or indirectly, the fruits of relevant contributions, and

b

that the making of any of the relevant contributions (“the excessive contributions”) has unfairly prejudiced the debtor’s creditors,

the court may make such order as it thinks fit for restoring the position to what it would have been had the excessive contributions not been made.

3

Subsection (4) applies where the court is satisfied that the value of the rights under the arrangement is, as a result of rights of the debtor under the arrangement or any other pension arrangement having at any time become subject to a debit under section 29(1)(a) of the Welfare Reform and Pensions Act 1999 (debits giving effect to pension-sharing), less than it would otherwise have been.

4

Where this subsection applies—

a

any relevant contributions which were represented by the rights which became subject to the debit shall, for the purposes of subsection (2), be taken to be contributions of which the rights under the arrangement are the fruits, and

b

where the relevant contributions represented by the rights under the arrangement (including those so represented by virtue of paragraph (a)) are not all excessive contributions, relevant contributions which are represented by the rights under the arrangement otherwise than by virtue of paragraph (a) shall be treated as excessive contributions before any which are so represented by virtue of that paragraph.

5

In subsections (2) to (4) “relevant contributions” means contributions to the arrangement or any other pension arrangement—

a

which the debtor has at any time made on his own behalf, or

b

which have at any time been made on his behalf.

6

The court shall, in determining whether it is satisfied under subsection (2)(b), consider in particular—

a

whether any of the contributions were made for the purpose of putting assets beyond the reach of the debtor’s creditors or any of them, and

b

whether the total amount of any contributions—

i

made by or on behalf of the debtor to pension arrangements, and

ii

represented (whether directly or indirectly) by rights under approved pension arrangements or excluded rights under unapproved pensions arrangements,

is an amount which is excessive in view of the debtor’s circumstances when those contributions were made.

7

For the purposes of this section and sections 36B and 36C (“the recovery provisions”), rights of a debtor under an unapproved pension arrangement are excluded rights if they are rights which are excluded from his estate by virtue of regulations under section 12 of the Welfare Reform and Pensions Act 1999.

8

In the recovery provisions—

• “approved pension arrangement” has the same meaning as in section 11 of the Welfare Reform and Pensions Act 1999;

• “unapproved pension arrangement” has the same meaning as in section 12 of that Act.

36B Orders under section 36A.

1

Without prejudice to the generality of section 36A(2) an order under section 36A may include provision—

a

requiring the person responsible for the arrangement to pay an amount to the permanent trustee,

b

adjusting the liabilities of the arrangement in respect of the debtor,

c

adjusting any liabilities of the arrangement in respect of any other person that derive, directly or indirectly, from rights of the debtor under the arrangement,

d

for the recovery by the person responsible for the arrangement (whether by deduction from any amount which that person is ordered to pay or otherwise) of costs incurred by that person in complying in the debtor’s case with any requirement under section 36C(1) or in giving effect to the order.

2

In subsection (1), references to adjusting the liabilities of the arrangement in respect of a person include (in particular) reducing the amount of any benefit or future benefit to which that person is entitled under the arrangement.

3

In subsection (1)(c), the reference to liabilities of the arrangement does not include liabilities in respect of a person which result from giving effect to an order or provision falling within section 28(1) of the Welfare Reform and Pensions Act 1999 (pension sharing orders and agreements).

4

The maximum amount which the person responsible for an arrangement may be required to pay by an order under section 36A is the lesser of—

a

the amount of the excessive contributions, and

b

the value of the debtor’s rights under the arrangement (if the arrangement is an approved pension arrangement) or of his excluded rights under the arrangement (if the arrangement is an unapproved pension arrangement).

5

An order under section 36A which requires the person responsible for an arrangement to pay an amount (“the restoration amount”) to the permanent trustee must provide for the liabilities of the arrangement to be correspondingly reduced.

6

For the purposes of subsection (5), liabilities are correspondingly reduced if the difference between—

a

the amount of the liabilities immediately before the reduction, and

b

the amount of the liabilities immediately after the reduction,

is equal to the restoration amount.

7

An order under section 36A in respect of an arrangement—

a

shall be binding on the person responsible for the arrangement; and

b

overrides provisions of the arrangement to the extent that they conflict with the provisions of the order.

36C Orders under section 36A: supplementary.

1

The person responsible for—

a

an approved pension arrangement under which a debtor has rights,

b

an unapproved pension arrangement under which a debtor has excluded rights, or

c

a pension arrangement under which a debtor has at any time had rights,

shall, on the permanent trustee making a written request, provide the permanent trustee with such information about the arrangement and rights as the permanent trustee may reasonably require for, or in connection with, the making of applications under section 36A.

2

Nothing in—

a

any provision of section 159 of the M2Pensions Schemes Act 1993 or section 91 of the M3Pensions Act 1995 (which prevent assignation and the making of orders that restrain a person from receiving anything which he is prevented from assigning),

b

any provision of any enactment (whether passed or made before or after the passing of the Welfare Reform and Pensions Act 1999) corresponding to any of the provisions mentioned in paragraph (a), or

c

any provision of the arrangement in question corresponding to any of those provisions,

applies to a court exercising its powers under section 36A.

3

Where any sum is required by an order under section 36A to be paid to the permanent trustee, that sum shall be comprised in the debtor’s estate.

4

Regulations may, for the purposes of the recovery provisions, make provision about the calculation and verification of—

a

any such value as is mentioned in section 36B(4)(b);

b

any such amounts as are mentioned in section 36B(6)(a) and (b).

5

The power conferred by subsection (4) includes power to provide for calculation or verification—

a

in such manner as may, in the particular case, be approved by a prescribed person; or

b

in accordance with guidance—

i

from time to time prepared by a prescribed person, and

ii

approved by the Secretary of State.

6

References in the recovery provisions to the person responsible for a pension arrangement are to—

a

the trustees, managers or provider of the arrangement, or

b

the person having functions in relation to the arrangement corresponding to those of a trustee, manager or provider.

7

In this section and sections 36A and 36B—

• “the recovery provisions” means this section and sections 36A and 36B;

• “regulations” means regulations made by the Secretary of State.

8

Regulations under the recovery provisions may contain such incidental, supplemental and transitional provisions as appear to the Secretary of State necessary or expedient.