Pensions on divorce interdisciplinary working group

Download the guide to the treatment of pensions on divorce (second edition).

About the project

The 2014 Nuffield funded study Pensions on Divorce (Woodward with Sefton), found that there was a widespread lack of confidence amongst practitioners on the issue of pensions on divorce, poor quality pension disclosure on the court files and a substantial proportion of potentially unfair outcomes. Of the 369 court files with a final financial remedy order studied, 80% revealed at least one relevant pension and yet only 14% contained a pension order. The study confirmed that offsetting pensions against other capital assets remained the most common way of dealing with pensions, but there was little if any agreement on how the pensions or the offset should be valued. The little, and sometimes contradictory, guidance that case law offered was chiefly geared towards bigger money cases.

Pensions Advisory Group First Report

The Pensions on Divorce study prompted a wider conversation amongst professionals working in the field and eventually led to the establishment in 2017 of the Pension Advisory Group (PAG). The PAG was an interdisciplinary working group chaired by Mr Justice Francis and His Honour Judge Edward Hess. The purpose of the original PAG was to provide an in-depth analysis of how pensions on divorce should be approached, particularly in relation to valuing pensions and offsetting them against other capital assets. The PAG comprised members of the judiciary, practising solicitors, barristers, a mediator and academics with special expertise in pensions and financial remedies on divorce, actuaries, financial advisers, and other pension experts.

The project aimed to make a major improvement to the practice of pensions on divorce and to upgrade the fairness and consistency of outcomes, which would be of particular benefit to those divorcing couples who were not especially wealthy but nevertheless held pensions of some value.

In July 2019, the PAG published its essential guide to the treatment of pensions on divorce. This long awaited report brought guidance to family judges, lawyers and pension experts, encouraging better understanding, fairer settlements and improved liability management.

PAG also published supplementary material including reports of focus groups, an online survey and an update to Appendix K of the report which dealt with pension fund insolvency.

In January 2021, PAG and Team Members Law for Life published the Survival guide to pensions on divorce, primarily for lay readers and non-specialist professionals.

Pensions Advisory Group Second Report

The 2019 Guide to the Treatment of Pensions on Divorce, and the 2021 Survival guide to pensions on divorce, have had a noticeable impact on knowledge and practice in the English and Welsh legal systems. As of February 2022, the Guide has been downloaded over 9,000 times, and the Survival guide has had over 25,000 page views. Both have received the endorsement of the President of the Family Division and Family Justice Council and a printed copy of the Guide has been distributed to most Financial Remedy Court judges in England and Wales. Building on this success, the Nuffield Foundation extended the project, allowing the research team and a refreshed Pension Advisory Group to update the Guides and ensure their continued relevance.

The team incorporated into the updated guides various changes which have occurred since 2019, including, for example, developments in case law, changes to terminology introduced by the Divorce, Dissolution and Separation Act, the effects of Brexit on international family financial issues, and the potential use of the Galbraith Tables. The team also considered a number of technical issues raised by PAG members and others, and consulted with key users of the existing guides to ascertain how useful they have been and what further guidance might be desirable. This newly updated version is available below, together with a summary list of changes.

Printed copies of the second edition of the Guide to the Treatment of Pensions on Divorce are available to purchase from Class Legal at the cost price of £22.