Fighting financial crime post Brexit: what next?
Jane Keir answers the follow question for This is Money, first published on Friday 22 June 2018:
"Have I messed up and just lost a £12,000 a year final salary pension?
My ex-husband and I divorced in June 2006. I was awarded a pension sharing order by the court for 100 per cent of one of his final salary pensions and I assumed that either he or the court submitted the order to the pension company to effect the transfer into my name after the decree absolute.
I have recently discovered that the order was never passed to the pension company (was this my responsibility)?
I have learned upon investigation that the pension fund no longer exists as a separate entity as described on the order. It merged with the fund of the parent company in 2012.
The administrator of the merged fund has told me that the order granted to my benefit in 2006 would no longer apply as it is out of date and also for an invalid named scheme.
My ex says he cannot be held liable for the failure to transfer as he fully complied with the court order and sent the completed transfer documents to my solicitor in June 2006 (he has shown me copies of the signed documents and the associated covering letter sent by his solicitor to mine).
He says that it was my responsibility to complete these documents with my own details and that of the pension scheme into which I wanted the funds to be transferred and therefore the failure to transfer lies entirely with me and my legal team.
His solicitor has advised him (apparently) that the 2006 pension sharing order is now invalid (also due to the time lapsed and merged pension) and that he cannot be prosecuted for failing to comply with the court order because he can prove that he did!
I am self employed and had been planning to live off the state pension and the proceeds from this defined benefit scheme in retirement. Now my plans are shot! What can I do?
My naivety on the pension transfer process has left me feeling very poor and also very embarrassed. Please help!"
It seems to me important steps may have been overlooked or missed along the way regarding implementing your pension sharing order.
But once these are investigated properly I would hope that you could still be pretty confident of receiving the £12,000 a year which was negotiated as part of your divorce.
Pension sharing orders are used commonly on divorce to help achieve a fair sharing of a couple’s financial resources.
They divide pension rights and benefits under an existing pension scheme so that each spouse has their own independent and separate provision, either in the existing scheme (known as an internal transfer), or those rights and benefits are transferred out altogether into a new scheme (known as an external transfer).
The mechanics for sharing a pension require the court order to state, in percentage terms, the amount which is to be transferred, for example 25 per cent, 50 per cent, 100 per cent and so on.
The court then requires a separate form called the Form P1 to be completed and attached to the order.
The Form P1 contains the essential information required to implement the pension sharing order including the full names, dates of birth and National Insurance numbers of both parties, the number of the pension plan or policy, the address of the pension provider and the name of the person responsible for administering the pension scheme.
Very importantly, it should also set out the charges to be made by the pension provider and who is to pay them. If there is no agreement/stipulation then they are paid by the transferor.
Once the pension provider has received all the documents, it has four months from either the date of the Decree Absolute or, if later, seven days from the expiry of the time limit for appealing the financial order (usually 21 days) in which to implement the pension sharing order.
As to whose responsibility it is to pass on the court order and the Form P1 to the pension provider, the Financial Remedy Rules state that where the court makes a pension sharing order, it must send or direct one of the parties to send to the pension provider a copy of the order, the Form P1 and the Decree Absolute.
So much will depend, in your case, upon what the court order says. It should have directed who is to do what.
You may find that the court itself has, in fact, sent on the documents to the pension provider which sometimes happens.
You should check your file by telephoning the court office. Have the case number and the date of the financial order handy when you make the call.
If the court has sent on the documentation then you need to get back in touch immediately with the pension provider and find out why it has not implemented the order.
If it cannot give you an answer, or is reluctant to communicate with you, then once you have exhausted its complaints procedure you can go to the Pensions Ombudsman and make a complaint.
The Pensions Ombudsman has the power to award compensation where someone loses out financially because of delays in implementing a pension sharing order.
The fact the original pension scheme has now merged into another complicates the position but it doesn’t necessarily follow that the order would no longer be able to take effect.
If you find that your court order does not direct who had the responsibility for passing it on to the pension provider, then if taking a share in your ex’s pensions was discussed at any time with your solicitor, you should check back over your papers and communications to see exactly what was said about getting a pension sharing order.
Contact your solicitor and ask for a full copy of your file. Your solicitors should have retained your papers for a period of six years from the end of the case.
As yours was a 'clean break' divorce in 2006 the paper file might have been destroyed, but you can still ask for electronic copies to be sent to you.
As long as you settled your account with your solicitors, then the electronic file belongs to you and you should ask for it to be transferred securely to you.
You should check carefully for any advice you were given as to how the order was to be implemented. It may be that you said you wanted to do any further work yourself, possibly because you did not want to pay any further legal fees, but your papers should tell you.
Even if you said that you would take care of implementing the pension sharing order yourself, your ex also knew the position and must be well aware that you have not received your share.
It may be worth your contacting him and asking him to join with you in seeking a variation of the existing order to enable the pension share to take effect now.
If the order requires him to transfer the pension to you and if he has not done so, then he could be in contempt.
It may be just as much in his interests as yours to comply with the order and make sure that the transfer is made.
Even if the original scheme against which the order was made has been merged with another scheme, it may still be possible to vary the original order, if you both agree, to provide you with a corresponding and appropriate share to that which should have been transferred to you after the original order was made.
The order itself will continue until it is discharged or varied, either by you or your ex. He could, for example, apply to discharge it if he believes that he has done all he can to comply with it.
You, on the other hand, might want to vary it if, because of the merger of the two pension schemes, you encounter problems in trying to implement the order and obtain the funds.
If the pension sharing order is not implemented the funds will remain within the merged pension scheme and will be available to your ex.
If you find out from looking at your old papers that your solicitors were responsible for implementing the pension sharing order, then you may be able to get them to take steps now to correct the position.
If they are at fault, then they should not charge you. If it is not possible to put things straight, then you may want to approach another law firm.
You may have a claim against your original solicitors and if so, you may be able to find a new firm to act for you on a 'no win, no fee' basis if you have lost out through no fault of your own.
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