Is My Pension Fund Safe?

[QCQC]

My husband and I are nearing the end of a 1 year IVA, which we had to do as the result of a business failure (NOT through mis-spending on credit cards etc).

The total payment on the IVA is £73k (including £6k of charges to the IVA company). In order to pay this we have made a monthly payment of £1000, we have cashed in an endowment of £13,395 and we have re-mortgaged our property, realeasing £47,565.

We also had a £32k loan secured on the property which we have had to repay before we could re-mortgage. As a result, we had a shortfall in the amount of money available so my husband decided to draw down £15,395 from his pension fund to ensure the total amount is paid.

The Supervisor from our IVA company has recently left and the woman who was his assistant is now our contact although we understand we do have a new supervisor. This woman seems to have turned very awkward and is coming up with all sorts of obstacles. Her latest missive states that we should have declared details of my husband's pension fund at the start of the process. However, they never asked for the details and we never thought about providing them.

What we are worried about is that the creditors will now want some of my husband's pension fund. Is this protected or do they have a claim on it?

QCQC

[catullus]

Hello QCQC

without seeing your proposal it is difficult to be certain but it would be very very rare that you would have to pay your pension fund in to the IVA.

Almost certainly there will be a clause in the proposal that refers to pensions and most likely it will refer to them as an excluded asset ie outside of the IVA.

It is possible that either the proposal or a creditor modification required you to freeze your pension cotributions, if possible, to increase the contribution in to the IVA, and possibly the new assistant is reviewing this aspect but, as you are now nearing the end of the IVA, I would have thought that it is a bit late and that there probably is little that the Supervisor can now do about it.

Do have a read of the proposal and the chairmans report to see if there is any reference to pensions along these lines.

[QCQC]

Hi catullus

Thank you for your advice. We have had some more discussions, both with our financial advisor and the guy who was previously our IVA supervisor. The IVA proposal document which we signed up to states that neither of us is a member of a pension fund. However, this is not strictly true. We both have pension pots but neither of us has paid into a pension fund for over 6 years. As far as we can remember, pensions were never a subject for discussion when we drew up the IVA proposal.

They are now talking about the fact that the lump sum can be seen as a windfall and we may need to offer it (some or all?) to creditors.

Do they have a right to see how much is in the pension funds? Do we have to disclose it? Can it be seen as a windfall and will we therefore have to give it up?

We have a meeting tomorrow morning so any information would be appreciated.

Thanks!

QCQC

[scaredkez]

QC just to let you know catallus is on holiday at the moment i am unsure as to when he/ she is back, so don't be alarmed when the post isn't answered, i know you need an answer as you have a meeting tomorrow, sorry
kerri

Please view my blog at: http://scaredkez.blogs.iva.co.uk/

[Adam Davies]

Hi
Unfortunately both our regular IPs are off on holiday so you will not get an answer before your meeting.
I,personally,think that your pension fund is safe as it was not part of your original IVA.It should not be classed as a windfall because it is a fund for you to use for funding your retirement and as such is not surplus.
Are you in talks with your actual IP or an assistant ?
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[QCQC]

Hi Andy - thanks for your advice. I've just rung the IVA Helpline and unfortunately their advice differs. The lady I spoke to believes that any lump sum, no matter where it is from, is classed as a windfall. I find this so hard to believe because as you say, this money is for our future, to fund our retirement, and I don't see how it can be classed as "surplus". What does anyone else think?

QCQC

[MelanieGiles]

Given that your husband appears to have make an incorrect declaration within his IVA proposal that he had no pension fund, you ought to take legal advice as to the implications of this. It seems to me that a meeting of creditors to ascertain their wishes may be appropriate, which will likely result in them accepting the pension money in full and final settlement, but best to be on the safe side to be sure.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[catullus]

One thought

Is there a section in your proposal headed up something like "excluded assets" that would read along the lines of

" I propose to exclude from the Arrangement all of my assets that would be excluded from my bankruptcy/persuant to section Insolvency Act 1986"

If there was such a clause it would give some comfort that the pensions were protected so long as their values were not entirely disproportionate to your debts but, as Malanie says above,your supervisor even in that event would almost certainly consider it necessary to revert to creditors.