Draft regulations have been issued by the DSS to complete the scope of protection offered to pensions by sections 11 and 12 of the Welfare Reform and Pensions Act 1999, in the event of bankruptcy. Regulations to permit the recovery of excessive contributions to the bankrupt's pension (ss. 15 & 16; and paras 69 and 71 of Sch 12 to the Act) are also included. The draft regulations, together with a commentary, were published on the DSS website on 5 February 2001. Responses are required by Friday 16 March 2001.

Exempt approved schemes, relevant statutory schemes and personal pension schemes are already excluded from a bankrupt's estate under s.11(2) of the Act, which was commenced on 29 May 2000. Reg 2 now prescribes the full scope of approved pension arrangements which qualify for this protection. (Reg 1 as usual contains a list of defined terms.) Regs 3 - 5 cover the circumstances in which a bankrupt's unapproved pension can be excluded from his or her estate, under s.12 of the Act (eg schemes where tax approval has been lost and FURBS).

Regs 6 - 8 specify how excessive (or in the case of a pension share awarded to a former spouse, "unfair") contributions should be calculated and recovered from the trustees or managers of the relevant pension scheme. The value of the bankrupt's pension rights is to be the cash equivalent, calculated on the same basis as for pension sharing (set out in SI 2000/1048 Reg 3). Reg 9 provides various time limits within which information is to be provided.

In Part III, Regs 10 - 17 set out very similar provisions for Scotland (the differences are only terminological).