I thank my noble friend Lady Altmann for tabling her Amendment 78, which introduces further conditions to the right to transfer. It would require the consent of a current or ex-spouse or civil partner of the member before a trustee or scheme manager could transfer a member’s savings. This condition would apply where the member was getting divorced or dissolving their civil partnership or might do so in the future. It would therefore apply to all members who might seek to transfer and are married or in a civil partnership.
The amendment would introduce unnecessary and onerous conditions into new legislation. Options already exist for those who seek a financial settlement on
divorce or the dissolution of a civil partnership. The law identifies when pensions should be taken into account as part of a financial settlement on divorce or dissolution of a civil partnership, and the courts will make the final decision if there is no agreed settlement.
Where a couple are negotiating a financial settlement on divorce or dissolution of a civil partnership, they are obliged to disclose all assets, including pensions. The process includes provisions to compel disclosure where the court is concerned that the financial disclosure might not be honest or complete. The amendment introduces a radical precedent where someone other than the member will determine the final use of their financial asset without a court order or notice being in place. It is not a requirement for individuals to seek their spouse or civil partner’s consent in respect of other financial assets, such as sole name bank accounts. Why then would we include such a requirement in pension legislation?
In addition, the amendment would place additional burdens on trustees to verify that the spouse or civil partner consents to the transfer. In doing so, it risks causing a conflict with the trustee or manager’s fiduciary duty to act in the best interests of members.
The noble Lord, Lord McKenzie, asked about types of pension and the name of the scheme, and said that people might lose out in a divorce settlement. Both persons in a couple are obliged to declare assets when coming to a financial settlement in the context of the dissolution of their relationship.