Pension bankruptcy protection
Ministers are being urged to clarify the law, to ensure pension assets are excluded from bankruptcy proceedings.
In a report published this week, the Commons Social Security Committee said the law needed to be changed. This was following a recent court decision that had confirmed the view of the Insolvency Service that retirement annuity contracts could be realised by the trustee of a bankrupt’s estate for the benefit of creditors.
Although the court ruling did not change the currently accepted position that occupational pension schemes were excluded, the committee said action was needed to clarify the position.
The committee also urged ministers to delay changes in the law to enforce the rights of divorced wives to a share in their husband’s pension rights, because of concerns regarding the millennium bug.
The MPs said they were concerned about the practicality of dealing with year-2000 and euro issues at the same time as pensions reforms.
‘While we would like to see the Pensions Sharing Bill coming forward in the 1998/99 parliamentary session,’ the MPs said, ‘we recommend that the government should consult interested parties on the possibility of delaying the implementation of the Pension Sharing Act until April 2001.’