APPENDIX 11
Memorandum submitted by the National Association
of Pension Funds (NAPF) (PS 15)
1. The NAPF continues to support the principle
of pension sharing based on a clean break between the divorcing
couple. We believe that occupational pension schemes will do all
they can to ensure the success of pension sharing provided that
(i) they are giving adequate time to prepare
for the new arrangements;
(ii) the procedures are not unduly complex
or expensive to implement; and
(iii) trustees and administrators do not
find themselves involved in disputes between the divorcing couple
and/or their advisers and are not subjected to unjustified or
frivolous complaints to the Pensions Ombudsman about the terms
of any order or its implementation.
2. The NAPF is concerned that because the Pensions
on Divorce provisions are included in a larger Bill there is a
risk that the subject may not receive the detailed attention it
requires.
3. The Clauses contain numerous regulation making
powers. Until the regulations are published it is not possible
to comment on the detail. Our concern is that pension sharing
should be clear and simple for occupational schemes to operate.
Regulations should be framed to ensure that the pension sharing
regime is workable and cost efficient. We hope that the draft
regulations will be published very shortly so that we can comment
on them.
4. We welcome the clarification that pension
sharing will only be available to those who begin divorce proceedings
after the legislation is in force. We would urge the Government
not to proceed with an implementation date of April 2000. It will
be extremely difficult for trustees to make the policy decisions
required, and to amend their IT systems, administration procedures
and scheme literature to meet this deadline.
5. We welcome the measures proposed to simplify
some of the procedures; in particular we are pleased that schemes
will not be required to obtain a certificate to hold safeguarded
rights. However, the process remains complicated and we would
hope that the regulation-making powers will be used to minimise
the complexity.
6. NAPF remains concerned about the need for
training about pensions issues generally and pension sharing in
particular for all involved in the divorce process. Judges, solicitors
and financial advisers will have to understand a significant amount
of detail about pensions issues if pension sharing is to be more
successful than earmarking.
7. We note that regulations will require charges
to be reasonable. NAPF has already expressed a willingness to
draw up a scale of charges based on our extensive knowledge and
experience of occupational pension schemes and we look forward
to further discussions on this matter.
8. Although not strictly a matter for the Committee
or the Department of Social Security, NAPF continues to believe
that members should be allowed to rebuild their pensions following
a pension sharing order/agreement. The requirement to record a
"negative deferred pension" adds considerably to the
complexity of the arrangements.
9. NAPF looks forward to further discussions
with DSS as the regulations are being framed. We will be happy
to let the Social Security Committee have clarification of any
of the matters raised in this note or any further comments on
specific issues, if requested.
8 March 1999
| 
