UK - Proposed changes in bankruptcy rules will increase the risk of pension funds being left underfunded with insolvent employers, lawyers claim.
They fear plans to reduce the ban on a bankrupt running a business from three years to 12 months may be exploited by individuals as a way of escaping pension fund debts.
The new rules – outlined in the Enterprise Bill – give trustees in bankruptcy only three years to recover property from a debtor.
Lawrence Graham partner Nick Pike said: “Existing bankruptcy regulations are quite strict.
“The trustee in bankruptcy is empowered to sell your assets any time in the future until your debt is discharged.
“The ramifications of the proposed legislation do not appear to have been fully debated or understood.”
A number of pension schemes have been prompted to lock in gains with a move into bonds after the estimated deficit across FTSE 100 DB pension schemes improved by £36bn, over the 12 months ending 30 June last year, JLT Employment Benefits found.
HM Treasury has agreed in principle to give NEST a £329m contingent liability guarantee in the event of the master trust's wind up or closure.
AMP Capital has set up a dedicated team to help institutional investors, including pension funds, invest in infrastructure through direct equity allocations.