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The Pensions (Northern Ireland) Order 1995

Status:

This is the original version (as it was originally made).

Assignment, forfeiture, bankruptcy, etc.,

Inalienability of occupational pension

89.—(1) Subject to paragraph (5), where a person is entitled, or has an accrued right, to a pension under an occupational pension scheme—

(a)the entitlement or right cannot be assigned, commuted or surrendered,

(b)the entitlement or right cannot be charged or a lien exercised in respect of it, and

(c)no set-off can be exercised in respect of it,

and an agreement to effect any of those things is unenforceable.

(2) Where by virtue of this Article a person’s entitlement, or accrued right, to a pension under an occupational pension scheme cannot, apart from paragraph (5), be assigned, no order can be made by any court the effect of which would be that he would be restrained from receiving that pension.

(3) Where a bankruptcy order is made against a person, any entitlement or right of his which by virtue of this Article cannot, apart from paragraph (5), be assigned is excluded from his estate for the purposes of Parts VIII to X of the Insolvency (Northern Ireland) Order 1989(1).

(4) Paragraph (2) does not prevent the making of—

(a)an attachment of earnings order under the Judgments Enforcement (Northern Ireland) Order 1981(2), or

(b)an income payments order under the Insolvency (Northern Ireland) Order 1989(3).

(5) In the case of a person (“the person in question”) who is entitled, or has an accrued right, to a pension under an occupational pension scheme, paragraph (1) does not apply to any of the following, or any agreement to effect any of the following—

(a)an assignment in favour of the person in question’s widow, widower or dependant,

(b)a surrender, at the option of the person in question, for the purpose of—

(i)providing benefits for that person’s widow, widower or dependant, or

(ii)acquiring for the person in question entitlement to further benefits under the scheme,

(c)a commutation—

(i)of the person in question’s benefit on or after retirement or in exceptional circumstances of serious ill health,

(ii)in prescribed circumstances, of any benefit for that person’s widow, widower or dependant, or

(iii)in other prescribed circumstances,

(d)subject to paragraph (6), a charge or lien on, or set-off against, the person in question’s entitlement, or accrued right, to pension (except to the extent that it includes transfer credits other than prescribed transfer credits) for the purpose of enabling the employer to obtain the discharge by him of some monetary obligation due to the employer and arising out of a criminal, negligent or fraudulent act or omission by him,

(e)subject to paragraph (6), except in prescribed circumstances a charge or lien on, or set-off against, the person in question’s entitlement, or accrued right, to pension, for the purpose of discharging some monetary obligation due from the person in question to the scheme and—

(i)arising out of a criminal, negligent or fraudulent act or omission by him, or

(ii)in the case of a trust scheme of which the person in question is a trustee, arising out of a breach of trust by him.

(6) Where a charge, lien or set-off is exercisable by virtue of paragraph (5)(d) or (e)—

(a)its amount must not exceed the amount of the monetary obligation in question, or (if less) the value (determined in the prescribed manner) of the person in question’s entitlement or accrued right, and

(b)the person in question must be given a certificate showing the amount of the charge, lien or set-off and its effect on his benefits under the scheme,

and where there is a dispute as to its amount, the charge, lien or set-off must not be exercised unless the obligation in question has become enforceable under an order of a competent court or in consequence of an award of an arbitrator.

(7) This Article is subject to section 155 of the Pension Schemes Act (inalienability of guaranteed minimum pension and protected rights payments).

Forfeiture, etc.

90.—(1) Subject to paragraphs (2) to (6) and Article 91, an entitlement, or accrued right, to a pension under an occupational pension scheme cannot be forfeited.

(2) Paragraph (1) does not prevent forfeiture by reference to—

(a)a transaction or purported transaction which under Article 89 is of no effect, or

(b)the bankruptcy of the person entitled to the pension or whose right to it has accrued,

whether or not that event occurred before or after the pension became payable.

(3) Where such forfeiture as is mentioned in paragraph (2) occurs, any pension which was, or would but for the forfeiture have become, payable may, if the trustees or managers of the scheme so determine, be paid to all or any of the following—

(a)the member of the scheme to or in respect of whom the pension was, or would have become, payable,

(b)the spouse, widow or widower of the member,

(c)any dependant of the member, and

(d)any other person falling within a prescribed class.

(4) Paragraph (1) does not prevent forfeiture by reference to the person entitled to the pension, or whose right to it has accrued, having been convicted of one or more offences—

(a)which are committed before the pension becomes payable, and

(b)which are—

(i)offences of treason,

(ii)offences under the Official Secrets Acts 1911 to 1989 for which the person has been sentenced on the same occasion to a term of imprisonment of, or to two or more consecutive terms amounting in the aggregate to, at least 10 years, or

(iii)prescribed offences.

(5) Paragraph (1) does not prevent forfeiture by reference to a failure by any person to make a claim for pension—

(a)where the forfeiture is in reliance on any enactment relating to the limitation of actions, or

(b)where the claim is not made within six years of the date on which the pension becomes due.

(6) Paragraph (1) does not prevent forfeiture in prescribed circumstances.

(7) In this Article and Article 91, references to forfeiture include any manner of deprivation or suspension.

Forfeiture by reference to obligation to employer

91.—(1) Subject to paragraph (2), Article 90(1) does not prevent forfeiture of a person’s entitlement, or accrued right, to a pension under an occupational pension scheme by reference to the person having incurred some monetary obligation due to the employer and arising out of a criminal, negligent or fraudulent act or omission by the person.

(2) A person’s entitlement or accrued right to a pension may be forfeited by reason of paragraph (1) to the extent only that it does not exceed the amount of the monetary obligation in question, or (if less) the value (determined in the prescribed manner) of the person’s entitlement or accrued right to a pension under the scheme.

(3) Such forfeiture as is mentioned in paragraph (1) must not take effect where there is a dispute as to the amount of the monetary obligation in question, unless the obligation has become enforceable under an order of a competent court or in consequence of an award of an arbitrator.

(4) Where a person’s entitlement or accrued right to a pension is forfeited by reason of paragraph (1), the person must be given a certificate showing the amount forfeited and the effect of the forfeiture on his benefits under the scheme.

(5) Where such forfeiture as is mentioned in paragraph (1) occurs, an amount not exceeding the amount forfeited may, if the trustees or managers of the scheme so determine, be paid to the employer.

Articles 89 to 91: supplementary

92.—(1) Regulations may—

(a)modify Articles 89 to 91 in their application to public service pension schemes or to other schemes falling within a prescribed class or description, or

(b)provide that those Articles do not apply in relation to schemes falling within a prescribed class or description.

(2) In those Articles, “pension” in relation to an occupational pension scheme, includes any benefit under the scheme and any part of a pension and any payment by way of pension.

Pension rights of individuals adjudged bankrupt, etc.

93.  After Article 315 of the Insolvency (Northern Ireland) Order 1989(4) insert—

Recovery of excessive pension contributions

315A.(1) Where an individual is adjudged bankrupt and—

(a)he has during the relevant period made contributions as a member of an occupational pension scheme, or

(b)contributions have during the relevant period been made to such a scheme on his behalf,

the trustee of the bankrupt’s estate may apply to the High Court for an order under this Article.

(2) If, on an application for an order under this Article, the High Court is satisfied that the making of any of the contributions (“the excessive contributions”) has unfairly prejudiced the individual’s creditors, the Court may make such order as it thinks fit for restoring the position to what it would have been if the excessive contributions had not been made.

(3) The High Court shall, in determining whether it is satisfied under paragraph (2), consider in particular—

(a)whether any of the contributions were made by or on behalf of the individual for the purpose of putting assets beyond the reach of his creditors or any of them.

(b)whether the total amount of contributions made by or on behalf of the individual (including contributions made to any other occupational pension scheme) during the relevant period was excessive in view of the individual’s circumstances at the time when they were made, and

(c)whether the level of benefits under the scheme, together with benefits under any other occupational pension scheme, to which the individual is entitled, or is likely to become entitled, is excessive in all the circumstances of the case.

Orders under Article 315A

315B.(1) Without prejudice to the generality of Article 315A(2), an order under that Article may include provision—

(a)requiring the trustees or managers of the scheme to pay an amount to the individual’s trustee in bankruptcy,

(b)reducing the amount of any benefit to which the individual (or his spouse, widow, widower or dependant) is entitled, or to which he has an accrued right, under the scheme,

(c)reducing the amount of any benefit to which, by virtue of any assignment, commutation or surrender of the individual’s entitlement (or that of his spouse, widow, widower or dependant) or accrued right under the scheme, another person is entitled or has an accrued right,

(d)otherwise adjusting the liabilities of the scheme in respect of any such person as is mentioned in sub-paragraph (b) or (c).

(2) The maximum amount by which an order under Article 315A may require the assets of an occupational pension scheme to be reduced is the lesser of—

(a)the amount of the excessive contributions, and

(b)the value (determined in the prescribed manner) of the assets of the scheme which represent contributions made by or on behalf of the individual.

(3) Subject to paragraphs (4) and (5), an order under Article 315A must reduce the amount of the liabilities of the scheme by an amount equal to the amount of the reduction made in the value of the assets of the scheme.

(4) Paragraph (3) does not apply where the individual’s entitlement or accrued right to benefits under the scheme which he acquired by virtue of the excessive contributions (his “excessive entitlement”) has been forfeited.

(5) Where part of the individual’s excessive entitlement has been forfeited, the amount of the reduction in the liabilities of the scheme required by paragraph (3) is the value of the remaining part of his excessive entitlement.

(6) An order under Article 315A in respect of an occupational pension scheme shall be binding on the trustees or managers of the scheme.

Orders under Article 315A: supplementary

315C.(1) Nothing in—

(a)any provision of section 155 of the Pension Schemes (Northern Ireland) Act 1993 or Article 89 of the Pensions (Northern Ireland) Order 1995 (which prevent assignment, or orders being made restraining a person from receiving anything which he is prevented from assigning, and make provision in relation to a person’s pension on bankruptcy),

(b)any provision of any enactment (whether passed or made before or after the making of the Pensions (Northern Ireland) Order 1995) corresponding to any of the provisions mentioned in sub-paragraph (a), or

(c)any provision of the scheme in question corresponding to any of those provisions,

applies to the High Court exercising its powers under Article 315A.

(2) Where any sum is required by an order under Article 315A to be paid to the trustee in bankruptcy, that sum shall be comprised in the bankrupt’s estate.

(3) Where contributions have been made during the relevant period to any occupational pension scheme and the entitlement or accrued right to benefits acquired thereby has been transferred to a second or subsequent occupational pension scheme (“the transferee scheme”), Articles 315A and 315B and this Article shall apply as though the contributions had been made to the transferee scheme.

(4) For the purposes of this Article and Articles 315A and 315B—

(a)contributions are made during the relevant period if—

(i)they are made by or on behalf of the individual at any time during the period of 5 years ending with the day of presentation of the bankruptcy petition on which the individual is adjudged bankrupt, or

(ii)they are made on behalf of the individual at any time during the period between the presentation of the petition and the commencement of the bankruptcy, or

and

(b)the accrued rights of an individual under an occupational pension scheme at any time are the rights which have accrued to or in respect of him at that time to future benefits under the scheme.

(5) In this Article and Articles 315A and 315B—

“occupational pension scheme” has the meaning given by section 1 of the Pension Schemes (Northern Ireland) Act 1993, and

“trustees or managers”, in relation to an occupational pension scheme, means—

(a)

in the case of a scheme established under a trust, the trustees of the scheme, and

(b)

in any other case, the managers of the scheme.

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