Alan Shatter (Dublin South, Fine Gael) | Oireachtas source

These amendments essentially relate to the new provisions in the Bill in regard to the treatment of pensions in the new and reformed insolvency processes. Amendment No. 4 provides for definitions in regard to relevant pension arrangements for the new debt resolution processes in bankruptcy. The definition is a prerequisite in regard to further amendments to the Bill providing that a pension pot will not be counted as an asset in the overall insolvency regime. For example, in the debt relief notice process, a pension pot will not be counted against the asset exemption limit of ¤400, but payments which the debtor is entitled to receive but has not yet received will be regarded as income. This amendment mirrors an amendment in the similar UK and Northern Ireland debt relief notice process to address a situation whereby small future pension arrangements push debtors over the asset exemption limit and prevent them from accessing this basic debt relief.

Amendments Nos. 25 and 28 are linked. Amendment No. 25 provides for the exemption in regard to a pension pot. However, this is subject to the provisions being inserted by amendment No. 28 which does not exempt income received or entitled to be received in the context of the income test in relation to a debt relief notice application.

Amendment No. 42 sets out how pension arrangements are to be treated in the context of debt settlement arrangements and personal insolvency arrangements. It provides that the DSA and PIA processes cannot require a debtor to hand over his or her pension pot or to draw down a pension early.

Amendment No. 72 inserts a new section in the Bill which will allow a creditor or a personal insolvency practitioner of a debtor in respect of whom a debt settlement arrangement is in force to make an application to the appropriate court for relief in accordance with this section where the creditor or the personal insolvency practitioner concerned considers that a debtor has made excessive contributions to a relevant pension arrangement. The net excessive contributions to the debtor's pension must have been made within the three-year period prior to the issue of the protective certificate. Subsection (3) provides that where the court finds that the debtor's pension contributions were excessive, it can direct such part of the contribution concerned, less any tax required to be deducted, to be paid by the person administering the relevant pension arrangement to the personal insolvency practitioner for distribution among creditors of the debtor. It may make such other orders as the court deems appropriate, including an order as to the costs of the application. Subsection (4) sets out matters that the court should have regard to in the consideration of this matter.

Amendment No. 117 is similar to amendment No. 72. The purpose of the amendment is to allow a creditor challenge a personal insolvency arrangement in a situation where the debtor may have made excessive pension contributions in the three years prior to the issue of the protective certificate with a view to putting funds out of reach of creditors.

Amendment No. 142a provides for the insertion of two new sections, new section 44A and new section 44B, into the Bankruptcy Act 1988. The new section 44A provides that the future entitlement to payment under a relevant pension arrangement, perhaps better and more colloquially described as a pension pot, of a person adjudicated bankrupt will not vest in the official assignee in bankruptcy. The section sets out the various conditions attached and lists the types of relevant pension arrangements accompanied by the section. However, any income from a pension, either in payment or whether there is an entitlement to receive a payment, is not exempt and may be claimed by the official assignee or the trustee in bankruptcy. This is a significant improvement in our bankruptcy law as it recognises the desirability of persons making contributions to provide for the future and not impose an excessive burden on the State. This provision is similar to that in the UK to exempt pension pots from being ceased in a bankruptcy.

Section 44B provides again that in a case where the bankrupt has made excessive contributions to his or her pension within the three years prior to being adjudicated bankrupt, the official assignee or the trustee in bankruptcy can apply to court for an order in relation to the pension for the purpose of ensuring the excessive contributions can be made available for distribution to creditors. This mirrors similar provisions in regard to excessive contributions in the debt settlement arrangement and personal insolvency arrangement processes. This is an important counterbalance to the exemption allowed in the previous section.