Government proposals to enable Pension Protection Fund compensation to be shared in the event of divorce will place administrative strain on the PPF, a consultant says.
Lane Clark & Peacock partner David Everett (pictured) says the Department for Work and Pensions (DWP) regulations - currently out for consultation - will increase the admin burden on the lifeboat fund due to additional information the PPF will have to supply to members.
Everett says this included: supplying information to the court, calculating the value, and the subsequent split - all of which occupational trustees currently do in relation to pension sharing.
"The existing requirements impose responsibilities on the managers of schemes - trustees - and it appears these responsibilities are being put upon the board of the PPF," he says."
The regulations - an extension of the Pensions Act 2008 - will enable PPF compensation to be shared when a person seeks a divorce, dissolution of a civil partnership or an annulment of their marriage or civil partnership.
Aon Consulting actuary and consultant Milan Makhecha says it is a necessary measure but agrees it could become administratively complex for the PPF.
He adds: "What we'll be interested in is whether this leads to any efficiencies in the process or precedents that can be adopted by pensions schemes in general."
The DWP's consultation closes on 22 June and the regulations are due to be implemented on 6 April next year.
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