Commentary on Sections Part 5: Civil Recovery of the Proceeds etc. of Unlawful Conduct Schedule 7: Powers of trustee for civil recovery Section 273: Payments in respect of rights under pension schemes
363.Section 273 allows the recovery of recoverable property from pension funds. In the case of other types of property, once the court has made a recovery order, recoverable property will be vested in the trustee for civil recovery, and will eventually be disposed of by the trustee, i.e. selling the property to raise money. However, rights in a pension scheme cannot be vested in the trustee for civil recovery in this way, as they cannot be transferred to another person and subsequently sold, as they are not a transferable or tradable commodity. Therefore, subsection (2)(a) provides that pension trustees or managers must pay to the trustee for civil recovery an amount equal to the value of the pension rights secured by the original payment or payments into the fund.
364.When pension trustees or managers incur costs before a recovery order is made, or when complying with a recovery order, subsection (4) provides that such costs may be reimbursed, either by deducting the appropriate amount from the sum paid to the trustee for civil recovery, or in another appropriate manner.
365.Pensions legislation and pension scheme rules contain provisions preventing any commutation, surrender or variation of pension rights. Clearly these provisions would be at odds with the Director’s and the Scottish Ministers’ new powers of recovery. Subsection (5) therefore provides that these provisions, whenever and wherever present, will not frustrate the Director’s or the Scottish Ministers’ ability to pursue recovery of the value of pension rights. Similarly, subsection (3) provides that a recovery order seeking to realise the value of pension rights overrides provisions of a pension scheme to the extent that the latter conflict with the provisions of the order.