Entitlement to Bankrupt’s Pension

Jones v Patel CA TLR 29 May 2001

Mr Patel was an employee of Brent LBC and also a director of a company. A bankruptcy order was made against him in 1995, when he was 50, in respect of debts exceeding £700,000. He was made redundant in 1998 when he was 53. He was entitled to a pension on ceasing to hold local government employment by reason of redundancy after the age 50. He received a basic index-linked pension and enhanced discretionary pension benefits, a basic lump sum and a discretionary enhanced lump sum, statutory redundancy pay and three months pay in lieu of notice. It was conceded that the statutory redundancy and pay in lieu of notice did not vest in the trustee, but the Court of Appeal upheld the decision of the judge that the basic and discretionary pension vested in Mr Patel’s trustee in bankruptcy under section 306 of the Insolvency Act 1986 in respect of the contributions he had made prior to the commencement of the bankruptcy, but not those relating to his post-bankruptcy service and contributions.