PART 7

Safeguarding interests of creditors

Excessive contributions

Recovery of excessive pension contributions
101
1
Where a debtor's estate has been sequestrated and the debtor—
a
has rights under an approved pension arrangement, or
b
has excluded rights under an unapproved pension arrangement,
the trustee in the sequestration may apply to the court for an order under this section.
2
Subsection (3) applies where 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.
3
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.
4
Subsection (5) 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—
a
the arrangement, or
b
any other pension arrangement,
having at any time become subject to a debit under section 29(1)(a) of the 1999 Act (see section 107), less than it would otherwise have been.
5
Where this subsection applies—
a
any relevant contributions which were represented by the rights which became subject to the debit are, for the purposes of subsection (2), to 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) are to be treated as excessive contributions before any which are so represented by virtue of that paragraph.
6
In subsections (2) to (5), “relevant contributions” means contributions to the arrangement or to any other pension arrangement—
a
which the debtor has at any time made on the debtor's own behalf, or
b
which have at any time been made on the debtor's behalf.
7
The court must, 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, or of any of, the debtor's creditors, 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.
8
For the purposes of this section and of sections 102 and 103, rights of a debtor under an unapproved pension arrangement are excluded rights if they are rights which are excluded from the debtor's estate by virtue of regulations under section 12 of the 1999 Act.
9
In the recovery provisions (see section 103(7))—
- “approved pension arrangement” has the same meaning as in section 11 of the 1999 Act, and
- “unapproved pension arrangement” has the same meaning as in section 12 of that Act.
S. 101 in force at 30.11.2016 by S.S.I. 2016/294, reg. 2