Can a right to a Guaranteed Minimum Pension (GMP) under a Section 32 buy-out policy (where the transfer came from a defined benefit occupational pension scheme) be claimed as an asset by the Official Receiver?

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Produced in partnership with Max Ballad of Freeths

Published on: 22 May 2023

A section 32 buy-out policy is a deferred annuity contract. Where the transfer value paid to the section 32 policy is in respect of benefits which include rights to Guaranteed Minimum Pension (GMP), the insurer undertakes to pay the GMP to the policyholder from GMP payment age (age 65 for a man and 60 for a woman) or to pay the spouse’s GMP to the member’s widow or widower on the member’s death.

Section 11 of the Welfare Reform and Pensions Act 1999 provides that rights under approved pension arrangements are excluded from a bankrupt’s estate. 'Approved pension arrangements' include registered pension schemes and annuities purchased for the purpose of giving effect to rights under a registered pension scheme including an annuity in payment before 6 April 2006 giving effect to schemes which were approved under the Income and Corporation Taxes Act 1988. A

Max Ballad

Legal Director, Freeths

Max has a rounded experience of pensions having worked for a corporate trustee which administered one of the largest UK defined benefit pension schemes and undertaking independent trustee wok before qualifying as a legal executive at DLA Piper in 2006. He also spent five years at specialist pensions law firm Arc Pensions Law.

Jurisdiction(s):

United Kingdom

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