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The Actuary The magazine of the Institute & Faculty of Actuaries

Pensions and divorce – revised procedure

The Department for Constitutional Affairs and the Court Service have agreed revised procedures and revised forms for pension-sharing and pension-earmarking cases, to be implemented from around March 2005 (exact date to be confirmed).

In summary, the revised procedure will be:

  • A new Form E contains very little detail of the pension arrangements and which will be much easier to complete. For each pension arrangement, there will be shown (a) type of scheme, (b) CETV (or for state additional pension, valuation of those rights), (c) if the CETV is a reduced CETV, what the unreduced CETV would be, (d) date of calculation of the CETV, (e) whether pension is in payment or in drawdown.
  • First court appointment takes place and judge gives fact-finding directions.
  • If pension sharing or earmarking is being considered, a new Form P3 (a Pension Inquiry Form) must be completed. This contains questions previously on Form E (but not all of them) and also the information required under statutory disclosure provisions (SI 2000/1048), which were not previously on Form E.
  • The Financial Dispute Resolution hearing takes place and a Consent Order for Ancillary Relief is made (by agreement or otherwise) which may have attached to it one or more newly revised Pension Sharing Annexes or Pension Attachment Annexes.

The new Pension Sharing Annex (Form P1):

  • Will no longer have a box for the effective date of the order to be completed by the court (incorrect dates are frequently filled in). Instead the form states in words how the effective date should be calculated based on the date of the decree absolute of divorce or nullity and the date of the order.
  • Will contain a statement (in Box E) that either a Form M1 has been completed (see below) or that the information under Regulation 4 of SI 2000/1048 has been received and that it appears that there is power to make a pension sharing order.
  • In cases where the ex-spouse has a choice of internal or external transfer and the ex-spouse has decided which option to go for, asks what that decision is.
  • Asks for optional information concerning any external arrangement that has agreed to receive the pension credit.
  • Contains boxes for information concerning options that may be relevant if the scheme is winding up, whether details of the transferor’s health have been provided where requested, and whether further information requested has been provided.
  • Contains instructions to scheme trustees/managers and to the court as to the next steps they must take.

The new Pension Attachment Annex (Form P2)
The new Pension Attachment Annex (for earmarking orders – Form P2) will contain separate boxes to indicate the following specified percentages:

  • The percentage of periodic pension payments to be paid to the ex-spouse.
  • The percentage of the maximum lump sum that is available to be commuted that should be commuted.
  • The percentage of the above that should be paid to the ex-spouse.
  • The percentage of any lump sum death benefit that should be paid to the ex-spouse.

Form D81 (also known as Form M1)
This form has to be lodged with the application for a Consent Order. The form includes various information regarding pension arrangements where pension earmarking is intended.

Currently, the form does not have questions relating to pension-sharing. Questions on whether the information under Regulation 4 of SI 1048/2000 has been received, and on whether it appears that there is power to make a pension-sharing order, will now be added