Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether pension fund holders may be liable for administration costs when pension fund providers are placed into administration.

Whether pension fund holders are liable for administration costs will ultimately depend on the type of pension fund and its rules. Pension funds in the UK can have several different structures, and the structure will affect administration.

Defined contribution personal pension schemes, including Self-Invested Personal Pensions, are the type of scheme most likely to enter administration. If such a provider goes into administration, its contractual rules may allow the insolvency practitioner to recover their fees from customers’ accounts. In some cases, the customers may be eligible for compensation from the Financial Services Compensation Scheme (FSCS), although this too will depend on the circumstances.

In other cases, if the pension assets are held under trust, the insolvency practitioner may be able to obtain a court order to recover their fees from the trust assets under what is known as the Berkeley Applegate doctrine.