How Safe Is Your Pension From Creditors

Is your pension as safe as you think it is? Our Head of International Pensions Bethell Codrington looks at a recent ruling and its knock-on effects to the industry.

Until the decision in Raithatha v Williamson, it had generally been assumed that an undrawn pension could not be caught by an Income Payments Order (IPO) and was therefore effectively beyond the reach of a Trustee in Bankruptcy (TIB). The principal issue in the Raithatha case was whether an IPO can be used by a TIB to secure monies from a pension scheme; which a bankrupt is entitled to but had elected not to draw.

Facts

• The bankruptcy order was made on 9 November 2010.
• 6 weeks before the bankrupt was discharged from bankruptcy the TIB made a without notice application for an injunction to restrain the respondent "from taking any steps to activate, draw down, dispose of, or otherwise howsoever exercise or deal with any of his rights, interests or entitlements, whether to the payment of a lump sum