Section 58A — Pensions Act 2004: Offence of avoidance of employer debt

Offence of avoidance of employer debt 58A 1 This section applies in relation to an occupational pension scheme other than—

a a money purchase scheme, or b a prescribed scheme or a scheme of a prescribed description.

2 A person commits an offence only if—

a the person does an act or engages in a course of conduct that—

i prevents the recovery of the whole or any part of a debt which is due from the employer in relation to the scheme under section 75 of the Pensions Act 1995 (deficiencies in the scheme assets),

ii prevents such a debt becoming due, iii compromises or otherwise settles such a debt, or iv reduces the amount of such a debt which would otherwise become due, b the person intended the act or course of conduct to have such an effect, and c the person did not have a reasonable excuse for doing the act or engaging in the course of conduct.

3 A reference in this section to an act or course of conduct includes a failure to act.

4 This section does not apply to a person if the act done, or course of conduct engaged in, by the person is in accordance with the person's functions as an insolvency practitioner in relation to another person.

5 For the purposes of this section a reference to a debt due under section 75 of the Pensions Act 1995 includes a contingent debt under that section.

6 Accordingly, in the case of such a contingent debt, the reference in subsection (2)(a) to preventing a debt becoming due is to be read as including a reference to preventing the occurrence of any of the events specified in section 75(4C)(a) or (b) of the Pensions Act 1995 upon which the debt is contingent.

7 A person guilty of an offence under subsection (2) is liable—

a on summary conviction in England and Wales, to a fine;

b on summary conviction in Scotland, to a fine not exceeding the statutory maximum;

c on conviction on indictment, to imprisonment for a term not exceeding seven years or a fine, or both.

8 Proceedings for an offence under subsection (2) may be instituted in England and Wales only—

a by the Regulator or the Secretary of State, or b by or with the consent of the Director of Public Prosecutions.

9 For the purposes of this section and sections 58B to 58D “ insolvency practitioner ”, in relation to a person, means—

a a person acting as an insolvency practitioner, in relation to that person, in accordance with section 388 of the Insolvency Act 1986, or b an insolvency practitioner within the meaning of section 121(9)(b) (persons of a prescribed description).