Excessive pension contribution recovery
Produced in partnership with Philip Hinks of 3 Verulam Buildings (3VB)
Excessive pension contribution recovery

The following Restructuring & Insolvency guidance note Produced in partnership with Philip Hinks of 3 Verulam Buildings (3VB) provides comprehensive and up to date legal information covering:

  • Excessive pension contribution recovery
  • When pension contributions are recoverable
  • Bankruptcies predating 29 May 2000
  • Approved/unapproved pension arrangements
  • Excessive contributions
  • Income payments orders
  • For further information, see:
  • Brexit

When pension contributions are recoverable

This practice note addresses two questions:

  1. whether a bankrupt’s pension arrangement falls within the bankruptcy estate and

  2. where the arrangement falls outside of the bankruptcy, whether contributions made to the arrangement can be claimed for the benefit of the estate

This practice note is only concerned with occupational pension schemes and personal pension arrangements. State pensions and (most) statutory pension schemes will not form part of the bankrupt’s estate, such that the only way in which a trustee may recover pension entitlements would be by way of an income payments order (discussed below).

Bankruptcies predating 29 May 2000

This section applies to persons made bankrupt as a result of bankruptcy petitions presented before 29 May 2000.

Contributions made in relation to both personal pension schemes and occupational pension schemes are ordinarily recoverable by the bankrupt’s trustee. A debtor’s contractual rights under such schemes are regarded as choses in action falling within the wide definition of property provided by section 436 of the the Insolvency Act 1986 (IA 1986).

Accordingly, contributions are considered to fall within the bankruptcy estate and are therefore available for the benefit of the bankruptcy creditors.

A pension will not, however, form part of the bankruptcy estate if it contains a forfeiture clause that does not offend the anti-deprivation principle. Such clauses may