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New good practice guide addresses shortfall in understanding of how to treat pensions on divorce

By Nuffield Foundation

An essential guide to the treatment of pensions on divorce has been published today by the Pension Advisory Group (PAG).

The long awaited report brings guidance to family judges, lawyers and pension experts encouraging fairer settlements and helping to manage liability.

PAG is a multi-disciplinary group of professionals specialising in financial remedies and pensions on divorce. The group is jointly chaired by Mr Justice Francis and His Honour Judge Edward Hess and is supported by the President of the Family Division and the Family Justice Council. The project has been partially funded by the Nuffield Foundation.

PAG has come together to produce a clear good practice guide to address the shortfall in understanding of how to treat pensions on divorce. PAG was determined to create a guide that demystifies the jargon of pensions and improves communication amongst the professionals working in this field across England & Wales.

The guide was born from the need to address the wide variation of financial settlements nationally which stems from a lack of understanding of how professionals should deal with the valuation, sharing or offsetting of pension fund assets.

Next to property, pensions are often the largest asset in any divorce settlement and their complexity is laden with risk which has in recent years caught the attention of the claims management sector. The widespread deficiency in knowledge is not only a hindrance to the client but also leaves professionals vulnerable to potential claims being brought against them. It is vital that practitioners understand what to look out for when handling pensions and are able to identify when they should seek specialist pensions advice to safeguard both their clients and themselves.

In understanding how pensions on divorce should be approached advisers will be better placed to serve their clients with fair settlements and mitigate the potential claim of alleged negligence.

Hilary Woodward, Honorary Research Associate Cardiff School of Law and Politics and project lead, said:

“The aim of this guide is to help judges and practitioners navigate their way with more confidence through the tricky field of pensions on divorce, and ultimately improve the fairness of outcomes for those going through divorce.”

Rhys Taylor, barrister, said:

“I hope that the PAG report will assist a more consistent and better informed approach to the treatment of pensions on divorce. Pensions on divorce remain, perhaps, the last bastion of unintended discrimination against women in family law.”

The Honourable Mr Justice Nicholas Francis and His Honour Judge Edward Hess, said:

“It is our hope that this document will assist and clarify the often difficult process of incorporating pension considerations into financial remedies cases in a way which is procedurally and substantively fair to the parties. Time will tell whether our hope will be realised.”

Sir Andrew McFarlane, President of the Family Division, said:

“I am extremely grateful to the Pension Advisory Group who have worked hard to produce guidance which de-mystifies this area and establishes clear ground rules for the proper approach to be taken in every case.”


By Nuffield Foundation

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