Pensions Act 2004

Pensions Act 2004

2004 CHAPTER 35

Commentary on Sections

Part 1 – the Pensions Regulator

Transactions at an undervalue

Section 53: Restoration orders: supplementary

205. This section provides that a restoration order may require any assets or property which were transferred or received as part of the transaction to be transferred back to the scheme (or the Board of the Pension Protection Fund where it has assumed responsibility for the scheme); or may require any person to pay a sum as specified by the Regulator to the scheme or the Board of the Pension Protection Fund (Subsection (2)). Subsection (3) ensures that a restoration order has no effect to the extent that it prejudices any interest in property which is acquired in good faith and for value. However, subsection (5) adds that, where certain people have acquired an interest in a property or received a benefit as a result of the transaction then, unless the contrary is shown, it is presumed that the interest was not acquired or the benefit was not received in good faith. Subsection (5) lists these people as:

• one of the trustees, managers or “appropriate persons” (as defined) who entered into the transaction and persons who are connected or associated with such persons at the time of the acquisition or receipt;

• any person who has notice of the fact that the transaction was at an undervalue at the time of the acquisition or receipt; or

• any person who, at the time of the acquisition or receipt, is a trustee or manager, or the employer in relation to the scheme, or is connected or associated with such persons.

206. Subsection (6) provides that sections 249 (connected persons) and 435 (associated persons) of the Insolvency Act 1986 apply for the purposes of this section as they do for the purposes of that Act. Section 74 of the Bankruptcy (Scotland) Act 1985 (associated persons) also applies as it does for that Act. Subsection (7) provides that references in the section to “property” cover a broad definition which includes money, goods, things in action, land and every description of property wherever situated, obligations and every description of interest.

207. Subsection (8) provides that references in this section to where the Board has assumed responsibility for a scheme are to where the Board has assumed responsibility under Chapter 3 of Part 2 of the Act (pension protection).