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Clare
Clare, Solicitor
Category: Law
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Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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I have a 2005 court order for pension sharing of a SSAPS.

Customer Question

I have a 2005 court order for pension sharing of a SSAPS. I was supposed to take the pension within 4 months and put it into my own pension fund. I did not. I made an informal arrangement with my ex husband to leave the funds within the scheme. There are currently 3 Trustees and a Professional Trustee who is also the Admin. At the time my husband was a Trustee and continues to be. There are also 2 retired members. In Jan 2014 I was 60yrs and requested my pension. My husband made a calculation based on interest deposit rates. He never put the money into a deposit account, but just left it with his fund. The court order states the amount at the time to be £200,000 which was 18.63% of the value of the fund. My husband currently wanted in Jan to give me £260,000. The professional trustees want to give me 18.3% of the value of the fund and in Dec 2013 that equated to £351,000 as dictated by the court order. I have an email from them confirming this. I have just had a letter from his solicitor offering me £300,000 I have been told informally by the prof trustees that this is in breach of the pension rules and we have to abide by the court order. Did my husband, back in 2005/6 have a duty as a Trustee to ensure that my funds were looked after in a good way. Does the law say that i am titled to the same percentage now as per the court order in 2005/6, which is what the prof. trustees are saying. The court order has still not been served formally on the prof trustees. Why has my husband still not done this. Is it important for him to do so, and is it something I can or shouldnt do at this stage? Am I culpable in all this as a lay person. The prof trustees obviously certainly have know about the court order since the end of 2013, and in a conversation with my husband recently he admitted a conversation about me leaving the money within the scheme several years ago. But there is nothing about this in writing. I would appreciate your view on this

In addition my husband is refusing to disclose an uptodate value he made of the fund, which owns commercial property.  Can he do this.  The prof trustee have asked him several times to arrange for a valuer to come the the property to make a valuation.

The fund grows from rental income.  The fund owns the property, and my husbands family own the business which pays rent. to it.

Submitted: 2 years ago.
Category: Law
Expert:  Clare replied 2 years ago.
Hi
Thank you for your question.
My name is Clare
I will do my best to help you but I need some further information first.
For clarity is it agreed that your ex husband has in fact added to his Pension Fund since the divorce?
Clare
Customer: replied 2 years ago.

Thank you
Clare

I have copied below the letter I have received from the solicitor of my ex husband. In answer to your question. As far as I am aware the fund is grown through rental income from the property which has been added to regularly since I divorced. I do not know if deposits have been made in his name. This has not been mentioned, so I guess not, but I cannot confirm this at present.

I have just noticed that he is referring to this as a matrimonial affair - yet surely the matrimonial side of it has been agreed. Is this not just a pension affair?

Dear Madam

Our Client – Clive Warren Hawes

We have been instructed by Clive Hawes in relation to family matters and in particular pension issues.

We understand that following divorce proceedings issued in the Watford County Court under Case No. WD05D00208, your marriage was dissolved by Decree Absolute on 13th March 2006. At that time our client was represented by Messrs Paul Montgomery Solicitors, and you were represented by Messrs Levison Meltzer Pigott Solicitors of London. Financial proceedings took place in Court, which culminated in agreement being reached in relation to financial matters. This agreement was embodied in an Order made by District Judge Rhodes on 26th October 2005. The Order was to take effect following Decree Absolute.

We attach a copy of the Order. We understand issues have arisen in relation to pension provision.

The Pension Sharing Annexe refers to the fact that on the 26th October*****made a Pension Sharing Order whereby our client as Transferor would transfer to you, as Transferee, an interest in the Hawes Executive Pension Scheme said to be such a percentage of the cash equivalent transfer value of the pension arrangement as is equivalent to £200,000 on the valuation date. The Pension Sharing Order makes it clear that the Order was to take effect on 16th November 2005 or on pronouncement of Decree Absolute if later, and the Decree Absolute was pronounced on 13th March 2006. The Order further made it clear that such action should take place within 4 months from the date of Decree Absolute, that is on or before 13th July 2006, or, if later, 4 months from the date on which the Financial Order, Pension Sharing Order, and Decree Absolute were served upon the pension provider, the Trustees of the Hawes Executive Pension Scheme. We understand as at the date of the Order, the Prof Trustees , the Trustees of the

Pension Scheme, have confirmed this would equate to a 13.83% share of the scheme, although no formal implementation has taken place.

As the recipient of the pension share it would have been usual practice for your lawyers to deal with service and implementation. We understand from our client however that the Pension Sharing Order was not served upon the Trustees, and therefore the 4 month implementation period has yet to commence. We understand this is because you were happy for your share of the fund, of £200,000, to be retained within the Scheme and you therefore chose not to commence implementation. No doubt you will have received legal advice at the time regarding the need to implement the Pension Sharing Order, and the impact of the failure to implement. Indeed we understand in recent communications with our client, you have indicated that you chose not to implement the Pension Sharing Order, because you were content for your funds to remain within the Hawes Executive Pension Scheme, as your e-mail sent to our client 29th March 2014 confirms. We understand at that time the pension fund comprised commercial property and cash reserves, and informally the sum of £200,000 was allocated, in order that such funds could be preserved for you.

We have advised our client to formally deal with the implementation of the Pension Sharing Order now, and to instruct the Trustees of the Pension Scheme to deal with this urgently. We understand from liaising with the Trustees of the Pension Scheme, that they are happy to implement the Pension Sharing Order but do need guidance regarding the amount to transfer to you particularly given the overall change in fund value from 13th March 2006 to date. The Pension Sharing Order clearly states that you should be allocated “such percentage of the CETV of the pension arrangement as is equivalent to £200,000.” We understand our client has provided you with his calculation regarding the potential growth of that sum given the cash reserves which you both agree were informally allocated to you. Given however no formal implementation took place and therefore there has been neither an internal nor external pension share, we understand the Trustees are unable to deal with implementation until they receive an instruction from both you and our client of the amount to allocate. They are also deeply concerned that only now are steps being taken to implement the Pension Sharing Order, despite the Order being made many years ago.

We have advised our client that one option would be to return the matter to Court and ask the District Judge to consider afresh the position regarding the pension. We have advised our client that the Court will be extremely critical of both of you for failing to implement the Pension Sharing Order in 2006, and the costs of returning this matter to Court could be substantial. Whereas the Trustees of the Pension Scheme acknowledge they had some awareness of the Court Order at least as far back as September 2007, given formal implementation did not take place, it is understandable the Trustees are seeking guidance.

If this matter is decided by the Court it is likely the Court will require a valuation of the assets within the Pension Scheme for matrimonial purposes and there will be costs associated with this, which will be an obligation on the part of both of you. Whilst we understand there has been a recent valuation of property within the scheme, this has been carried out for internal purposes and our client has been informed by his Finance Director, David Thorpe, this cannot be utilised for matrimonial purposes and be released to the Prof Trustees. The process of returning the matter to Court will be lengthy and expensive and costs will be borne by both of you. We hope therefore that agreement can be reached regarding the amount to be implemented and therefore a joint instruction can be given to the Trustees of the Pension Scheme.

The attached schedule prepared by our client, based on interest received in relation to cash reserves at that time, calculates your growth in funds to arrive at a figure of £251,559.99, to be expressed as a percentage of the pension funds. Our client acknowledges however that you both share responsibility for the failure to implement the Pension Sharing Order, and that there was no formal internal pension sharing. Whilst informally cash reserves were allocated, the pension fund also comprises commercial property, and the overall fund has seen growth. The Trustees of the Pension Scheme, have suggested that a 13.83% share of the fund would equate to a figure of £351,000 as at 5th April 2013 which is contrary to the clear intention of the Court at that time to award you £200,000 expressed as a percentage. Furthermore, this figure is disputed as it includes

income received within the Pension Scheme post the Order being made including rental income and interest from cash reserves and deposits. These sums need to be excluded from any valuation figures as they are post matrimonial assets.

In order to avoid litigation, the costs of revaluing the scheme for matrimonial purposes, costs of preparing accounts, and returning this matter to Court, we are instructed to propose that a payment of £300,000 expressed as a percentage be assigned to you and that implementation in relation to the Pension Sharing Order take place. We would be grateful if you could confirm your agreement to this course of action.

We would stress this is not intended to be put forward for negotiation purposes but is a serious attempt to settle matters.

These issues are complex and we would urge you to seek your own independent legal advice. If you take this letter to your Lawyer you may ask him or her to respond on your behalf. We look forward to hearing from you as quickly as possible.

Expert:  Clare replied 2 years ago.
Hi
Just to confirm - the only people in this fund are the two of you?
Clare
Customer: replied 2 years ago.

there are 3 trustees. (3 brothers) and 2 retired members.

There is also a professional trustee

As per the court order - see above letters - I have a share of my ex-husbands share.

Expert:  Clare replied 2 years ago.
Hi
Yes but there are no other beneficiaries?
Clare
Customer: replied 2 years ago.

Correct - no other beneficiaries - it is just as it says in the letter. Thanks

The 3 brothers have an equal share of the fund. There is currently approx 900 thousand in the cash account and the property which I have not seen a valuation of.

Expert:  Clare replied 2 years ago.
Hi
Ok.
The specific question that needs to be answered is what funds have been added to the account since the order was made.
This is not a question of how much has the fund increase din value - it is about what extra has been put into the fund
Have you been given any indication of whether or not this has happened?
Clare
Customer: replied 2 years ago.

I have just had unconfirmed information that in 2007 an additional 400 thousand pounds was added.

I have only just learnt this.

Thank you

Expert:  Clare replied 2 years ago.
Hi
May I ask - re you dealing with the letters yourself (as in do you need me to give you an idea of what to write back)
Clare
Customer: replied 2 years ago.

I have a pension/financial advisor and a solicitor and a letter of reply in hand. This solicitor wants to take to task the Pension Trustees for their duty of care to my benefit. In that they did not look after it in my best interests and that my ex husband as a Trustee had Trustee Duties to inform the others and to make sure the court order was enacted and not to allow me to leave it within their pension fund. My advisors think that leaving it on deposit for 8/9 years was not a good idea.

As you say - what is the impact of further deposits after the court order. Also the wording of the court order:

The wording of the court order against: "The specified percentage value of the pension arrangement to be transferred" answer is " Such percentage of the CETV of the pension arrangement as is equal to £200,000 on the valuation day chosen by the PRFD under the WKPA 528"

What exactly does this mean ie/ does it mean the order is expressed as a percentage or as a cash sum, or something else. Because the prof trustees are applying the current percentage as was the percentage when the court order was made.

I have a feeling my ex-husband is seeing it as a cash sum and that is why he thought he could just leave it on depost.

I hope this is clear. Thank you.

Expert:  Clare replied 2 years ago.
Hi
It is indeed correct that the order shoudl have been properly served on the Pension trustees - it was in fact the responsibility of both parties to do so,
from what you say as I understand that you were happy to leave the Pension in that Pension Fund and did not understand that the agreed percentage should have been transferred into your name and held separately
From that point on you would have been entitled to benefit from any general increase in the fund - but NOT to a share of any new funds invested
You can and should send a Formal Notice and copy of the Order to the Trustees now so that that part of the matter is resolved
So far as the cleverly drafted letter from his solicitor is concerned they have missed the obvious point that you are entitled not only to the £200,000 but also the extra it has earned.
The only question is how much of the extra is attributable to the extra capital injected into the fund.
So your choice is to either accept the figure on offer - or gamble that the new calculation will get you more!
Please ask if you need further details
Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33501
Experience: I have been a solicitor in High Street Practice since 1985 with a wide general experience.
Clare and other Law Specialists are ready to help you
Customer: replied 2 years ago.

The prof trustees and my advisors have stated that the offer in the letter is in breach and therefore not allowed. In your opinion am I entitled to the growth from the rental income of the property.

I would like to know how my ex-husband arrived at the figure of 300. For the past 7 months he has refused to disclose any info on the fund in writing, and has omitted to tell me about the 400 thousand deposit.

Am I entitled to full disclosure of the workings of the fund. How can I make any diecision without full knowledge of whats gone on?

My advisors are about to chase for a valuation of the property. Fingers crossed.....

May I come back to you on this as the story evolves.

My advisors sent a letter to all the trustees last Friday holding them responsible for all this.

I have now served the court order formally on the Trustees

Expert:  Clare replied 2 years ago.
Hi
I cannot see how the Trustees can be responsible if they were not served
However it should be possible for them to calculate what the current position WOULD have been IF they had moved the £200,000 into a "pot" in your name at the time
Do please ask for me if you need further information as the matter progresses!
Clare
Customer: replied 2 years ago.

Hello Clare

I hope you had an enjoyable summer. This matter is still ongoing. I received a robust letter last week from the other side.... saying that the court order says I was entitled to £200,000 and that I and my solicitor were responsible for serving and notifying the trustees of the order and inferred that I should take it up with my original solicitors and that the orig £200 plus interest from the cash account is all i am entitled to. I am still awaiting my solicitors response. What do you think?

Expert:  Clare replied 2 years ago.
Hi
Who does the Order say should deal with notification?
Clare
Customer: replied 2 years ago.

I am reading the pension sharing order now and cannot see a paragraph that says who is responsible. Are you online now?

Expert:  Clare replied 2 years ago.
Hi
I am indeed
Do you have the Pension sharing annexe to the order?
Clare
Customer: replied 2 years ago.

This is the court order:

1.NAME OF TRANSFEROR: Clive Warren Hawes

2.NAME OF TRANSFEREE: Natalie Carolyn Hawes

3.TRANSFEROR NI NUMBER: - I will leave this out

4.DETAILS OF THE NAME AND ADDRESS OF THE PERSON RESPONSIBLE FOR THE PENSION ARRANGEMENT AND THE POLICY: Hawes Pension Scheme

5.THE SPECIFIED PERCENTAGE VALUE OF THE PENSION ARRANGEMENTS TO BE TRANSFERRED IS: Such percentage of the CETV of the CETV of the pension arrangement as is equivalent to £200,00 on the valuation day chosen by the PRFD under the WKPA 529.

6. HOW THE PENSION SHARING CHARGES ARE TO BE APPORTIONED BETWEEN THE PARTIES: Equally

7. DATE ON WHICH THIS ORDER IS TO TAKE EFFECT: 16th November 2005 or on pronouncement of Decree Absolute if later.

THE PERSON RESPONSIBLE FOR THE PENSION ARRANGEMENTS MUST DISCHARGE HIS LIABILITY IN RESPECT OF THE PENSION CREDIT CREATED BY THIS ORDER BY FOUR MONTHS FROM THE DATE OF DECREE ABSOLUTE OR, IF LATER, FOUR MONTHS FROM THE DATE ON WHICH HE HAS RECEIVED ALL OF THE FOLLOWING;

A. THIS ORDER INCLUDING THIS ANNEX

B. THE DECREE OF DIVORCE AND

C. THE INFORMATION PRECCRIBED BY REGULATION 5 OF THE PENSIONS AND DIVORCE ETC (PROVISION OF INFORMATION0 REGULATIONS 2000.

Expert:  Clare replied 2 years ago.
Hi
In that case it was for both solicitors to do and his solicitors cannot avoid their share of responsibility.
Clare
Customer: replied 2 years ago.

So... in your view....... am I entitled to a percentage share of the entire scheme at its current value, or.... as my husband and his solicitor think....... the cash and the interested it has accrued over the years from the deposit account they kept it in.

Expert:  Clare replied 2 years ago.
Hi
My view is that you are entitled to a share that reflects 18.63% of that part of the pension fund that was in existence at the time the order was made
Clare
Customer: replied 2 years ago.

Which was £200,000. So.... then..... what your view........ that as the money was left with my husband and within the pension fund.... should be the way the interest is calculated for that period. There are conflicting thoughts on this.....

Expert:  Clare replied 2 years ago.
Hi
It is not a matter of interest as that is not on the whole how pension funds increase - it is a matter of how much that part of the fund has increased by now - and you are entitled to that percentage of it
This is a calculation that the Pension fund can and must do
Clare
Customer: replied 2 years ago.

This is the conflict....the pension fund professional fund admins state that I am entitled to (in their opinion) what the court stated in 2005 - The percentage of the fund as valued then - whtich equated to 18.63% and £200,000. See the wording above. Whereas my husband states that my stake should be £200,000 which he left in a deposit account, waiting for me to take action. The deposit account within the pension fund.

Not forgetting that no-one has contacted me about this for the last 8 years. And also, me neither did anything about it, I just presumed it was growing with the rest of the fund.

Neither my solicitor or my pension advisor are absolutely sure what is the answer. My solicitor is seeking guidance and should be back to me shortly. If you are interested then I will keep you informed of the outcome.

If you look back at the letter I copied - it confirms about the fund has grown - and contrary to my previous statement about the £400,000 deposit - this is wrong - and the growth has come from rental income and value of the land.

Expert:  Clare replied 2 years ago.
Hi
The pension fund manager must also give you your share of the increase in the fund.
At least that is my opinion
Clare
Customer: replied 2 years ago.

Sorry if I keep repeating....The professional trustees DID make a calculation as you suggested and the figure they came to was £351 in December 2013. and this was when the conflict started....... then, my husband made an offer of 300, but the pension fund manager (Professional Trustees) won’t agree to a deal between me and exhusband because they believe it will represent an unauthorised transfer of benefits within the pension – even if it is based upon a “fair assessment”

It seems that both you and the fund managers believe that I am entitled to 18.63% of the fund value as of today. My husband view and his solicitor is I am entitled to the cash and the deposit account interest only, accrued since 2005

They are also saying that both I and my solicitor were responsible for making sure I acted on the court order and suggest I take it up with them

Shall I send you a copy of the recent letter? In an case my solicitor is on vacation this week and will speak to counsel next week. I am involving you in this as it is useful to get an outside view on it.

I dont want to get into a costly war between solicitors.

Expert:  Clare replied 2 years ago.
Hi
Both parties and their solicitors are responsible for putting the Order into effect.
In this case your ex has no excuse as it appears that he did take action and instructed the Trustees to put £200,000 in a separate account
Clare
Customer: replied 2 years ago.

No .... he did not...... it was not ring-fenced. He just left it in the deposit account as part of his pot. Absolutely nothing was done. He did speak by telephone to the Fund Managers around about this time (by his own admission) to say that there was a court order in place. And in that telephone conversation they told him that if I was allowed to leave the money in the account that there might be difficulties in the future. But he did nothing other to agree verbally with me that I could leave it there (while I sorted out what to do with it).

There is absolutely nothing in writing about this.

Does he as a lay Trustee have a greater responsibility than me to ensure it was dealt with?

Expert:  Clare replied 2 years ago.
Hi
Arguably yes
Clare
Customer: replied 2 years ago.

As this is alive again - I will keep in touch with you about it. It will be interesting to hear what counsel has to say about it all. The Pension Managers are on my side on this and refused ex-husbands request last year to pay the amount he wants. Thanks

Customer: replied 2 years ago.

I have just been re-reading your advice - and..... my question is..... what constitutes deposits. Because....... the fund has increased through rental income from the factory on the land - the pension fund owns the land and buildings (?) and the family business Hawes Signs pays rent to the pension fund. If these payments are deposits then I would be entitled to the rise or fall of the value of the land and buildings - and not the cash rental deposits. This surely (with a valuation of the land and property) could be a fairly straightforwared calculation and a way of resolving this? If the Pension Managers can be persuaded that this would not be a breach.

Expert:  Clare replied 2 years ago.
Hi
Deposits would be new monies added to the funds
I think that the Pension Managers are well aware of what should happen - it is your ex who is the problem!
Clare
Customer: replied 2 years ago.

thanks then - your words give me hope - its just how best to go forward without incurring high costs. My solicitor and finance advisor have seemed so far to give good advice - I am sure I will come back to you in the next round.!!

I have new question on another matter - still surrounding my husband and this time its about reduction in maintenance contributions. Shall I ask you here or start again..... It is certainly storming in my house at the moment!!

Expert:  Clare replied 2 years ago.
Hi
It would be best to raise it as a separate question - do please feel free to ask for me
Clare

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