6. SCOTLAND—CLAUSES
2 AND 32(2)
6.1 Future events
We believe that in Scotland it has been common
for the parties to put a past service reserve valuation on the
total pension rights the member might expect by the date of retirement.
Therefore it is a significant change to Scottish law if the CETV
is to be used as the measure of value. We would nevertheless recommend
that the CETV still be used as the appropriate measure, because
future events cannot be predicted, and because it is readily available.
To the extent that these uncertainties need to be taken into account
between the parties, they should be factored into the agreed percentage
of the CETV by the parties.
6.2 Straight-line time apportionment
Pension rights do not necessarily accrue uniformly,
but we understand that they are calculated for the purpose of
ascertaining "matrimonial property" in Scotland as if
they do. This is a fairly crude mechanism. A more sophisticated
calculation method would be to compare a CETV at the beginning
of the marriage and at the "relevant date" at the end
of it. However, there may already be difficulties for schemes
in producing CETVs at the relevant date, which may be some years
in the past. These difficulties would be exacerbated if they had
to produce a CETV as at the beginning of the marriage.
6.3 The valuation date
Clause 4(6) states that the value of the member's
rights is based on the cash equivalent on the day when the pension
sharing order takes effect, or a later date within the implementation
period. This is not consistent with the approach to valuation
used in Scotland.
6.4 "Pension arrangement"
We note that the definition to be included in
s.25D of the MCA, and s.27 of the Family Law (Scotland) Act, includes
an annuity purchased for the purposes of an occupational pension
scheme, and we wonder whether this might cause confusion if the
annuity is in the name of the trustees of the scheme, where it
would not be clear whether it is the trustees or the annuity provider
that are to split the rights.
