The Draft Bankruptcy (Désastre) (Pensions) Jersey Regulations, if approved by the States, will ensure that a debtor’s pension will be protected if he or she is declared insolvent.
At the current time if an individual is declared bankrupt it is possible for pension funds to be included in the total property assets made available to claimants.
Economic Development executive Paul de Gruchy said the reason behind the change was to bring Jersey legislation in line with the UK and also to encourage investment in pensions.
‘A pension is a long-term arrangement to provide an adequate income in retirement and should not be used to meet personal debts.
Mr de Gruchy said it was already possible in law for the Viscount to claw back excessive pension contributions if they were considered ‘more than adequate’ for retirement income, so there would be little opportunity for a bankrupt to stash away large sums in a pension and thereby avoid claims.
In a legal sense he said that the change would simplify and clarify and probably save public money in the long term.
‘In any case, a pension tends not to be worth much until someone is of retirement age and most people are aware that the States pension might not be at the same level in future,’ he added.
