2. PRIMARY
CONCERNS
2.1 Separation orders
The Association acknowledges and accepts that
it will not be possible to make a pension sharing order when the
court makes a separation order. However, this is likely to produce
hardship under some schemes, particularly old occupational schemes,
where the scheme rules may provide that a separated spouse ceases
to be entitled as of right to a widow's pension on the death of
her husband and can only receive such a pension at the discretion
of the trustees. Short of extending pension sharing to separation
orders, a solution may be for the Inland Revenue to issue a Practice
Direction removing Inland Revenue approval from all schemes with
such provisions, unless they amend their rules within the stipulated
timescale.
2.2 Variation applications and retrospection
The Government's stated intention is that the
new pension sharing provisions will not apply retrospectively
(Consultation Document Part 1, chapter 2, paragraph 21). This
is consistent with the objective of certainty in family proceedings
and will avoid a deluge of applications in relation to cases predating
the implementation of the Pension Sharing Bill, where there may
well be a dispute as to whether or to what extent pensions have
already been dealt with in the original settlement. A similar
policy of no retrospection was adopted when the earmarking provisions
of the Pensions Act 1995 were implemented.
The Association, therefore, notes with concern
that an element of retrospection has been introduced by the variation
provisions found in the amendments to the Matrimonial Causes Act
1973, s31 introduced by Schedule 1, paragraph 6.
By virtue of the Family Law Act 1996, Schedule
9, paragraph 6(2), s31(7) to (7F) have effect "in relation
to any order made before the coming into force of the amendments".
Paragraph 6(6) of Schedule 1 to the Pension Sharing Bill introduces
into s31(7B) a new (ba), which gives the court power on effecting
a clean break on a variation application to make one or more pension
sharing orders. By virtue of the Family Law Act 1996, Schedule
9, paragraph 6(2), this new power could be used to make a pension
sharing order even though the variation application relates to
an order made before the implementation of the Pension Sharing
Bill.
Curiously Schedule 1, paragraph 6(7) introduced
a new s31(7G) and (7H), which will not, as presently drafted,
be applied retrospectively, even though the two subsections are
linked to the new s31(7B)(ba).
It is submitted that it would be inconsistent
for Parliament to breach its stated objective of no retrospection
by permitting a pension sharing order to be made on a variation
of an order which was made before the coming into force of the
Family Law Act 1996 and the Pension Sharing Bill.
2.3 Multiple pension sharing orders
Matrimonial Causes Act 1973, s24B(1) (inserted
by Schedule 1, paragraph 3 of the Bill) envisages that the court
may at the appropriate time make one or more pension sharing orders.
However, s24B(5) places a restriction on the power to make pension
sharing orders by providing that the court may not make a pension
sharing order under s24B if it has made such an order in relation
to the marriage on a previous occasion and the order has not been
discharged. The scheme of the Bill, therefore, envisages that
it is possible to make more than one pension sharing order against
different pension arrangements, but that all such orders must
be made simultaneously. The Association considers that this is
unduly restrictive. It is suggested that it would be appropriate
to insert in s24B(5) the words "and in relation to the pension
arrangement" after "in relation to marriage". Such
an amendment would prevent more than one pension sharing order
in relation to the same pension arrangement, but would enable
pension sharing orders to be made at different times in relation
to different pension arrangements, where, for example, the party
without pension rights only becomes aware of the existence of
a further pension arrangement at a later stage or for any other
good reason.
A similar amendment will be required in relation
to nullity in s24E(1) (Schedule 1, paragraph 3).
A similar amendment will be required in relation
to variation orders in s31(7G) (Schedule 1, paragraph 6(7).
29 June 1998
