By Jenne Mannion The long-awaited regulations providing for pension sharing on divorce should be ope...
By Jenne Mannion
The long-awaited regulations providing for pension sharing on divorce should be operating in the UK by late in 2000
The pension sharing regulations were issued for consultation last week by the Lord Chancellor, Lord Irvine. These stated that the Welfare Reform and Pensions Act which would introduce provisions for ancillary relief in proceedings for divorce, judicial separation or nullity will be brought forward from the date anticipated by the industry of April 2001 to late in 2000
That date finds the middle ground between the date initially proposed, by the former and current Governments, of April 2000 and industry expectations that the introduction of such regulations would take a year longer than expected, therefore not being ready until April 2001
Stewart Ritchie, director of pensions development at Scottish Equitable, welcomed the earlier date, providing the courts, lawyers and providers in both life offices and pension schemes can quickly bring themselves up to speed with the new regulations
He said: "There are indications that people are holding off on starting their divorce proceedings until the new regulations take effect. The crucial time is the start date for divorce proceedings so people are holding back
The new orders would provide a mechanism to enable pension rights to be split by the courts and a new pension to be created for a non-member spouse out of the member spouse's pension
Ritchie said a key addition in the draft regulations is the valuation of pension rights by the courts. He said: "This means the pension is classified as a matrimonial asset and its value can, within limits outlined by the regulations, be determined by the courts. This is a welcome move in the event that either side feels a cash equivalent transfer value is inappropriate. In that case a court may exercise some discretion
Other provisions in the Bill state that information concerning the value of pension rights must be provided by the pension arrangement to its member. Additionally, the pension provider must be notified of a change of circumstances. For example, if a divorced party remarries he or she must notify the provider within two weeks
Ritchie said: "Technically there is not a problem with this but the timeframe could have the effect of restricting a new couple's honeymoon to that two-week period
Copies of the draft regulations can be obtained by calling 0171 210 8696 and are available on website www.open.gov.uk/lcd. Comments should be sent to John Briden by 15 October at Family Policy Division, Selborne House, 54-60 Victoria Street, London, SW1A 6QW
Search for replacement to begin imminently
60+ £300bn ISA savings
Has technology moved on?
Total funds on list rise from 26 to 58
What made financial headlines over the weekend?