House of Commons Hansard Debates for 4 Jul 1995

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Yeo, Tim

Young, Rt Hon Sir George

Tellers for the Noes: Mr. Michael Bates and Mr. Timothy Wood.

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Question accordingly negatived.

New clause 23

Pensions on divorce, etc.: Scotland

`.--(1) In section 8(1) (orders for financial provision) of the Family Law (Scotland) Act 1985 ("the 1985 Act"), after paragraph (b) there is inserted --

"(ba) an order under section 12A(2) or (3) of this Act;". (2) In section 10 of the 1985 Act (sharing of value of matrimonial property)--

(a) in subsection (5)--

(i) after "party" there is inserted "(a)"; and

(ii) for "or occupational pension scheme or similar arrangement" there is substituted--

"or similar arrangement; and

(b) in any benefits under a pension scheme which either party has or may have (including such benefits payable in respect of the death of either party),

which is"; and

(b) after subsection (7) there is inserted--

"(8) The Secretary of State may by regulations make provision-- (a) for the value of any benefits under a pension scheme to be calculated and verified, for the purposes of this Act, in a prescribed manner;

(b) for the trustees or managers of any pension scheme to provide, for the purposes of this Act, information as to that value, and for the recovery of the administrative expenses of providing such information from either party,

and regulations made by virtue of paragraph (a) above may provide for that value to be calculated and verified in accordance with guidance which is prepared and from time to time revised by a prescribed body and approved by the Secretary of State.

(9) Regulations under subsection (8) above shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(10) In this section--

"benefits under a pension scheme" includes any benefits by way of pension, whether under a pension scheme or not;

"pension scheme" means--

(a) an occupational pension scheme or a personal pension scheme (applying the definitions in section 1 of the Pension Schemes Act 1993, but as if the reference to employed earners in the definition of "personal pension scheme" were to any earners);

(b) a retirement annuity contract; or

(c) an annuity, or insurance policy, purchased or transferred for the purpose of giving effect to rights under a pension scheme falling within paragraph (a) above; and

"prescribed" means prescribed by regulations.

(11) In this section, references to the trustees or managers of a pension scheme--

(a) in relation to a contract or annuity referred to in paragraph (b) or (c) of the definition of "pension scheme" in subsection (10) above, shall be read as references to the provider of the annuity;

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(b) in relation to an insurance policy referred to in paragraph (c) of that definition, shall be read as a reference to the insurer.".

(3) After section 12 of the 1985 Act there is inserted--

"Orders for payment of capital sum: pensions lump sums 12A.--(1) This section applies where the court makes an order under section 8(2) of this Act for payment of a capital sum (a "capital sum order") by a party to the marriage ("the liable party") in circumstances where--

(a) the matrimonial property within the meaning of section 10 of this Act includes any rights or interests in benefits under a pension scheme which the liable party has or may have (whether such benefits are payable to him or in respect of his death); and

(b) those benefits include a lump sum payable to him or in respect of his death.

(2) Where the benefits referred to in subsection (1) above include a lump sum payable to the liable party, the court, on making the capital sum order, may make an order requiring the trustees or managers of the pension scheme in question to pay the whole or part of that sum, when it becomes due, to the other party to the marriage ("the other party").

(3) Where the benefits referred to in subsection (1) above include a lump sum payable in respect of the death of the liable party, the court, on making the capital sum order, may make an order-- (a) if the trustees or managers of the pension scheme in question have power to determine the person to whom the sum, or any part of it, is to be paid, requiring them to pay the whole or part of that sum, when it becomes due, to the other party;

(b) if the liable party has power to nominate the person to whom the sum, or any part of it, is to be paid, requiring the liable party to nominate the other party in respect of the whole or part of that sum;

(c) in any other case, requiring the trustees or managers of the pension scheme in question to pay the whole or part of that sum, when it becomes due, to the other party instead of to the person to whom, apart from the order, it would be paid.

(4) Any payment by the trustees or managers under an order under subsection (2) or (3) above--

(a) shall discharge so much of the trustees' or managers' liability to or in respect of the liable party as corresponds to the amount of the payment; and

(b) shall be treated for all purposes as a payment made by the liable party in or towards the discharge of his liability under the capital sum order.

(5) Where the liability of the liable party under the capital sum order has been discharged in whole or in part, other than by a payment by the trustees or managers under an order under subsection (2) or (3) above, the court may, on an application by the any person having an interest, recall any order under either of those subsections or vary the amount specified in such an order, as appears to the court appropriate in the circumstances.

(6) Where--

(a) an order under subsection (2) or (3) above imposes any requirement on the trustees or managers of a pension scheme ("the first scheme") and the liable party acquires transfer credits under another scheme ("the new scheme") which are derived (directly or indirectly) from a transfer from the first scheme of all his accrued rights under that scheme; and

(b) the trustees or managers of the new scheme have been given notice in accordance with regulations under subsection (8) below, the order shall have effect as if it had been made instead in respect of the trustees or managers of the new scheme; and in this subsection "transfer credits" has the same meaning as in the Pension Schemes Act 1993.

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(7) Without prejudice to subsection (6) above, the court may, on an application by any person having an interest, vary an order under subsection (2) or (3) above by substituting for the trustees or managers specified in the order the trustees or managers of any other pension scheme under which any lump sum referred to in subsection (1) above is payable to the liable party or in respect of his death. (8) The Secretary of State may by regulations--

(a) require notices to be given in respect of changes of circumstances relevant to orders under subsection (2) or (3) above; (b) make provision for the recovery of the administrative expenses of complying with such orders from the liable party or the other party.

(9) Regulations under subsection (8) above shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(10) Subsection (10) (other than the definition of "benefits under a pension scheme") and subsection (11) of section 10 of this Act shall apply for the purposes of this section as those subsections apply for the purposes of that section.".

(4) Nothing in the provisions mentioned in section 164(5) above applies to a court exercising its powers under section 8 (orders for financial provision on divorce, etc.) or 12A (orders for payment of capital sum: pensions lump sums) of the 1985 Act in respect of any benefits under a pension scheme which fall within subsection (5)(b) of section 10 of that Act ("pension scheme" having the meaning given in subsection (10) of that section).'.-- [Mr. Arbuthnot.]

Brought up, and read the First time.

Mr. Arbuthnot: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Michael Morris): With this, it will be convenient to discuss the following: New clause 1-- Pensions on divorce, etc. --

`In the Matrimonial Causes Act 1973, after section 24A there is inserted--

"Pensions

24B--(1) On granting a decree of divorce, a decree of nullity of marriage or a decree of judicial separation or at any time thereafter (whether, in the case of a decree of divorce or of nullity of marriage, before or after the decree is made absolute), the court may make a pensions adjustment order (referred to in this section as "an order") for the benefit of a party to the marriage.

(2) An order shall where the court so determines bind a person who is not a party to the marriage but who is liable to pay any benefit under a pension scheme to a party to the marriage or any successor to such a person.

(3) An order is an order adjusting the rights and benefits to which either party to the marriage is or may become entitled to under any pension scheme and in particular the court may by such an order require--

(a) either party to the marriage to pay to the other such lump sum or sums as may be specified in the order (without prejudice to any other order which may be made under section 23(1) or (3)); or (b) the administrator of a pension scheme to treat the party to the marriage in favour of whom the order is to be made as a member of the pension scheme in relation to such benefits as may be specified in the order which were acquired by the other party to the marriage before the decree of divorce or nullity was made absolute or before the decree of judicial separation, or

(c) the administrator of a pension scheme to make such payment or payments as may be specified in the order into such other pension schemes as may be nominated by the party to the marriage in favour of whom the order is made, or

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(d) the administrator of a pension scheme to pay such part of any pension as may be specified in the order to the party in favour of whom the order is made for such term as may be specified not extending beyond the death of either party to the marriage, or (e) the administrator of a pension scheme to pay such part of any dependant's pension as may be specified in the order to the party in favour of whom the order is made for such term as may be specified beginning with the death of the other party to the marriage and not extending beyond the death of the party in whose favour the order is made, or

(f) either party to the marriage to pay such administrative costs incurred by the administrator of the pension scheme in responding to any application for an order or in implementing an order.

(4) An order shall not be made--

(a) under subsection (3)(b) above unless the administrator of the pension scheme consents to membership of the pension scheme for the party to the marriage who is not already a member of the pension scheme, or

(b) under subsection (3)(c) above unless the court is satisfied that the administrator of the pension scheme nominated by the party in whose favour the order may be made has agreed to accept such payment or payments, and in the event of the administrator being unwilling to accept such payment or payments he may be required to notify the parties to the marriage and the court.

(5) It shall be the duty of the court in deciding whether to exercise its powers under this section and, if so, in what manner to have regard in particular to--

(a) the matters referred to in section 25 save for the words "in the foreseeable future" in section 25(2)(a), (b) and (f), and (b) the effect that child care or other domestic responsibilities have had or will have on the ability of each of the parties to the marriage to make provision for his retirement, and

(6) The Secretary of State in agreement with the Lord Chancellor shall by regulations provide for the date and method of valuation to be applied by the court to rights under a pension scheme when making an order and to provide for notice of any application for an order to be given to the administrator of the pension scheme.

(7) The Secretary of State may by regulations make such provision as may be appropriate to meet the special circumstances of unfunded public sector schemes by varying or excluding the powers of the court under this section.

(8) Nothing in the provisions mentioned in subsection (9) below applies to a court exercising its powers under this section. (9) The provisions referred to in subsection (8) are--

(a) section 203(1) and (2) of the Army Act 1955, section 203(1) and (2) of the Air Force Act 1955, section 128G(1) and (2) of the Naval Discipline Act 1957 or section 159(4) of the Pension Schemes Act 1993 (which prevent assignment or orders being made restraining a person from receiving anything which he is prevented from assigning);

(b) section 84 of the Pensions Act 1995;

(d) any provision of the pension scheme in question.

(10) the making of an order shall in no circumstances form the basis of any decision made by the Commissioners of Inland Revenue to remove the exempt approved status or to alter the tax status of a pension scheme provided that--

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(a) the party to the marriage in whose favour an order has been made shall be treated for the purpose of retention of benefits as the member; and

(b) the maximum benefits payable to and in respect of the party to the marriage whose rights have been varied by the order shall be limited to the benefits that would have been payable if the order had not been made.

(11) No order or orders shall be made which shall have the effect of increasing the liabilities of any pension scheme beyond those which might have been incurred had the parties to the marriage remained married until the death of the party against whom the order is to be made.

(12) After paragraphs (2)(f) of section 31 there shall be inserted:

"(g) any order made under section 24B(3)(d) or (e) above" (13) After subparagraph (ii) in section 35(2) there shall be inserted:

"or (iii) by adjusting the rights and benefits to which either party to the marriage is or may become entitled under any pension scheme."

(14) Nothing in this section shall affect any proceedings commenced before the commencement of this section.

(15) In this section--

"administrator" means the trustees of an occupational pension scheme or the administrators or managers of such a scheme in the absence of trustees or the administrators or managers of a personal pension plan;

"member" means a member of an occupational pension scheme or a person having a personal pension plan or retirement benefit plan or other similar arrangement; and

"pension scheme" means an occupational pension scheme or personal pension scheme or retirement benefit plan or other similar arrangement.'.

New clause 2-- Pensions on divorce, etc (Life Assurance) -- `In the Matrimonial Causes Act 1973, after section 24B there is inserted:

"Life Assurance

24C--(1) On granting a decree of divorce, a decree of nullity of marriage or a decree of judicial separation or at any time thereafter (whether, in the case of a decree of divorce or of nullity of marriage, before or after the decree is made absolute), the court may make an order requiring either party to the marriage--

(a) to nominate the other party to the marriage or a child of the family for such benefits under a pension scheme as may be specified in the order,

(b) to effect such policy or policies of life assurance for the benefit of the other party to the marriage or of a child of the family as may be specified in the order,

(c) to nominate the other party to the marriage or a child of the family as a beneficiary under any existing policy or policies of life assurance as may be specified in the order, and

(d) to make such contributions to a pension scheme and pay such premiums in respect of a policy of life assurance for such term as may be specified in the order.

(2) Any order made under subsection (1) above may contain such directions for the compliance with any conditions for the implementation and maintenance of such life assurance (including medical examination) as the court thinks fit.

(3) It shall be the duty of the court in deciding whether to exercise its powers under this section and, if so, in what manner to have regard in particular to the matters referred to in section 24B(5).

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(4) After paragraph (2)(g) of section 31, there shall be inserted:

"(h) any order made under section 24C above."

(5) Nothing in this section shall affect any proceedings commenced before the commencement of this section.

(6) In this section "pension scheme" shall have the meaning referred to in section 24B(15) of this Act.".'.

New clause 15-- Pension provision on death of person not providing for spouse --

`There shall be inserted in section 2 of the Inheritance (Provision for Family and Dependants) Act 1975 (Power of court to make orders) a new paragraph--

"(g) an order in respect of any pension rights of the deceased.".'.

Amendment No. 2, in clause 164, page 121, leave out from beginning of line 25 to end of line 26 on page 124.

Amendment No. 6, in clause 164, page 121, line 26, after `1973', insert

`in section 25 there is inserted after subsection (1)--

"(1A) Where a court is satisfied that it has not had regard to any pension in deciding whether to exercise its powers under sections 23, 24 or 24A above, it shall have power to vary any order which it has made to take account of that pension".

(1A) In that Act,'.

Government amendments Nos. 69 to 72.

Amendment No. 3, in clause 164, page 122, line 15, after `question', insert

`(a) to ensure that the other party is informed of the extent of those rights, and (b)'.

Government amendments Nos. 73 to 81.

Amendment No. 4, in clause 176, page 129, line 26, leave out `165' and insert `164'.

Amendment No. 5, in clause 176, page 129, leave out lines 29 to 31.

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