Pensions Act 2004

Commentary on Sections

Part 1 – the Pensions Regulator

Applications under the Insolvency Act 1986

Section 58: Regulator’s right to apply under section 423 of Insolvency Act 1986

213.This section allows the Regulator to apply for an order under Section 423 of the Insolvency Act 1986 (transactions defrauding creditors) if the pension scheme is owed money by the employer and either:

• the Board of the Pension Protection Fund has obtained an actuarial valuation of the fund, which outlines both the assets and the protected liabilities of the scheme (the cost of benefits for members to the same level which would be paid by the Board of the Pension Protection Fund, non member liabilities of the scheme and the estimated cost of wind-up) and the value of the assets are not sufficient to meet these liabilities at the time of the qualifying insolvency event; or

• the trustees or managers of the scheme have obtained an actuarial valuation which indicates that the funding objective (see section 222(the statutory funding objective)) is not being met.

214.If the debtor is declared bankrupt, a corporate body which is being wound-up or is in administration, or a partnership which is being wound up or is in administration, then the Regulator must get the court’s permission to make an application under section 423 of the Insolvency Act 1986.

215.An application made under this section is treated as being made on behalf of the victims of the transaction (trustees, members of the scheme or the Board of the Pension Protection Fund).