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Pensions: Insolvency

Volume 489: debated on Tuesday 10 March 2009

To ask the Secretary of State for Work and Pensions whether the Government taking a majority stake in a company in order to prevent it from bankruptcy would be considered an insolvency event for the purpose of the Pension Protection Fund. (260979)

[holding answer 5 March 2009]: No. For the purposes of the Pension Protection Fund, an insolvency event occurs if it is an event as described within the Pensions Act 2004. Section 121 of that Act sets out when an insolvency event occurs in relation to an individual, a company or a partnership. For a company, an insolvency event may, for example, occur when an administrative receiver is appointed or the company enters administration under the provisions of the Insolvency Act 1986. It would not be an insolvency event for the Government to take a majority stake in a company.