MONITORING OF EMPLOYERS' PAYMENTS TO PERSONAL PENSION SCHEMES (Hansard, 3 November 1999)

§ The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley)
I beg to move, That this House agrees with the Lords in the said amendment.

§ Mr. Deputy Speaker (Mr. Michael J. Martin)
With this, it will be convenient to discuss Lords amendments Nos. 18, 19, 82, 102 and 163 to 175.

§ Mr. Bayley
In view of the time constraints, I shall be brief. To set out the background, the Bill provides that, in the event of bankruptcy, pension rights in a tax-approved pension scheme will be protected from seizure by the trustee in bankruptcy. However, to prevent people from using pensions deliberately to put money beyond the reach of creditors, a mechanism is needed to allow the courts to order recovery of excessive contributions. In deciding whether contributions were excessive, courts 384 will have to consider whether the person's creditors have been unfairly prejudiced by the making of contributions and, in particular, whether any of the contributions were made for the purpose of putting assets beyond the reach of creditors and whether the total amount of contributions was excessive, in view of the bankrupt's circumstances at the time they were made.
The Lords amendments deal with the interaction of two provisions in the Bill: the pension entitlement on bankruptcy and pension splitting on divorce. The amendments do three things. First, they insert provisions for dealing with the recovery of excessive contributions in Scottish cases where the bankrupt's pension rights have been shared on divorce. Schedule 12 already contained provisions for England and Wales. Secondly, the amendments provide more detail about the way in which the provisions will work in cases where pension sharing has occurred. Thirdly, they make technical changes to clarify the drafting.
In summary, the amendments do not affect policy, but improve the way in which the measure is drafted. They are necessary to make the provisions work properly.