Pension schemes rarely sit at the top of the list when an Insolvency Practitioner opens a new case. Asset realisations, creditor claims and statutory investigations tend to take the early attention, and understandably so. But pension obligations carry their own deadlines, and they do not wait for the rest of a case to catch up. That gap, between what needs attention and what tends to get it, is where firms like Clumber Consultancy come in.
We work exclusively with UK Insolvency Practitioners and businesses on employee and pension matters in insolvency, and one of the relationships we are proud of is the one we have built with Antony Batty & Company. It is a good example of how pensions support can sit alongside a case team rather than apart from it.
What tends to get missed early
The pattern we see most often is not a lack of diligence; it is a lack of time. A Section 120 notice under the Pensions Act 2004 has to reach The Pensions Regulator, the Pension Protection Fund and the scheme’s Trustees or Managers within 14 days of appointment, or within 14 days of becoming aware of the scheme. That is a tight window in the middle of everything else an early-stage case demands.
Section 22 of the Pensions Act 1995 is a separate obligation again, and one that is easy to assume is covered by the s120 notice. It is not. Where a Trust Based occupational pension scheme exists, which includes most Auto Enrolment Master Trust arrangements and not only Defined Benefit schemes, written notice is needed both on appointment and again 6 to 8 weeks before the Liquidation closes. Treating the two duties as one and the same is a compliance gap we see regularly.
Where the detail carries real weight
Unpaid pension contributions are another area where the detail matters more than it first appears. Employee contributions deducted from wages but never passed to the provider can be claimed back through the Redundancy Payments Service using forms RP15 and RP15a, but only by the Liquidator or someone competent to act on their behalf. Getting the split right between preferential employee claims and unsecured employer claims, and evidencing it properly with a Proof of Debt from the RPS, is exactly the kind of technical groundwork that protects a Liquidator’s position later in the case.
Defined Benefit schemes bring a different order of complexity again. Where an employer sponsoring a DB scheme becomes insolvent and the scheme is underfunded, the Pension Protection Fund may step in following the s120 notice, assuming creditor rights for the scheme and working through funding position, eligibility and long-term treatment with the Liquidator. These liabilities can dwarf the rest of a case’s unsecured position, which is precisely why they need identifying early rather than surfacing midway through.
Why we work the way we do with IP firms
Our role is not to replace the case team’s judgement, it is to sit alongside it on the pensions side specifically, so that these deadlines and obligations are handled properly from the point of appointment rather than picked up later under pressure. That is the basis of our relationship with firms such as Antony Batty & Company, where pension considerations are built into the early case review rather than treated as a separate exercise once other statutory duties are out of the way.
If you are an Insolvency Practitioner and pension arrangements are part of a case you are working on, we would be glad to talk it through.
