Receiving My Public Sector Pension

Brokeandhappy

Hi Guys,
I'm currently paying into an IPO which ends March 2017 - 3 years after bankruptcy. I can retire from my current job as a Firefighter in April 2017 after 30 years service with a lump sum and a monthly pension payment, as I would have finished paying my IPO by the time I receive it will the lump sum payment be safe?
They did ask me about my pension when going bankrupt so I'm not hiding anything I just didn't tell them when I was due to retire as I could stay on longer than the 30 years if I want to.
Many thanks.

debt_doctor

Hi,


Short answer first; Yes your lump sum will be safe in the circumstances you describe.
The law around PRIVATE pensions has been in turmoil over the last few years. In the first instance (since May 2000) Bankrupts could decide for themselves whether they would take their lump sum (typically 25%) during their undischarged bankruptcy period or during an IPA period. Not surprisingly, no one did as they would have lost the lump sum directly to the OR.
Then (around 2 years ago??) a case was brought by an Insolvency Practitioner(IP) which was successful in that the bankrupt could now be forced to take their lump sum if it were available to them during the undischarged or IPA period.
This was considered 'bad law' but remained unchallenged for some time. IP's were delighted by this 'bad law' and especially at the thought of the up coming pension reforms coming in to play were anyone aged 55 or over could have ALL of their pension as a lump sum - so the IP could take the entire lot.
Sadly for the IP's, those pesky legal people at the High Court overturned the 'bad law' (hooray!) and currently we are back to the beginning whereby the bankrupt has a choice to elect to take the lump sum or not.
Occupational pensions were never considered to be at risk under the above 'see-saw' laws, I just thought I would provide information for those in the same boat, but with a private pension.
A further note is that the IP's did intend to appeal - so it's not over yet, although I'm hearing there is 'little chance' of them being successful. (possibly the same chance of Jeremy Corbyn becoming leader of the Labour Party......ooh, erm....)
#jezwecan
DD

Brokeandhappy

Thanks debt doctor for the detailed response, there's one more question if that's ok. I could in theory retire earlier than the April, I could retire in December 2016 but am I right in thinking there was a case somewhere out there where the IP took the person to court to take there pension lump sum off of them?

Cobalt77

Brokeandhappy wrote: »

Thanks debt doctor for the detailed response, there's one more question if that's ok. I could in theory retire earlier than the April, I could retire in December 2016 but am I right in thinking there was a case somewhere out there where the IP took the person to court to take there pension lump sum off of them?

Is it seriously even worth considering taking the risk for the sake of 4 months?

debt_doctor

I agree with Cobalt.
It would depend upon whether the OR saw the lump sum as income or an asset. There is an argument to be had and I wouldn't want to risk it.
If classed as income, then if still under an IPA, the whole lot would disappear as a 'one off' IPA.
If classed as an asset, the as you are discharged, it could not be 'after acquired property' so would be safe.
Highly risky.
DD