Investing a pension

Hi,

Yes, it is possible for you to complete both the NHS and 2nd State Pension implementations. Is your solicitor assisting with the drafting of the Consent Order and the pension sharing orders?

When I work with clients I ask for the draft orders to be sent to me so that I can ensure that mistakes and time delays are minimised. So I would argue that a decent IFA would be available to help you with these too.

However, there is no doubt that the IFA you choose will add the most value on the external transfer. This is a big decision for you to make and you will need to be aware of the risks involved and the many options. Have you decided what you want to achieve from the pension transfer in terms of your overall retirement goals?

Typically, IFAs will work on a fee or commission basis and they will charge you for the initial work. Any ongoing review work would need to be paid for as well (if needed) and again this is often paid for out of the fund.

However, you should be very clear before you start working with an IFA what their charging structure is and what service you will receive for a given level of fee/commission.

To ensure total clarity at outset, I always send my clients an engagement letter setting out exactly what work I will undertake on their behalf and whether they require my ongoing review service.

I hope that helps.

Regards

Phil

Thanks Phil, yes I guess my solicitor is doing the consent order and pension sharing order for me, I have emailed him the details on NHS costs rising 600% in January so he will realise speed is of the essense on that one!

Hi,

Yes a massive incentive on that one!

Regards

Phil

About the pension member dying before the Pension Sharing Order is implemented - I dimly recall it's all about something called the "effective date"
TPAS website:
"The Pension Sharing Order takes effect from 'the date on which the Decree Absolute of Divorce or nullity is pronounced or if later, either (a) 21 days from the date of this Order, unless an appeal has been lodged in time, in which case (b) the effective date of the Order determining that appeal'."

So at what point in the Pension Sharing process is the new share legally "owned" by the recipient and unaffected by the sad demise of the pension member?
Looks as though a Pension Sharing Order issued by the court +Decree Absolute= the pension share ordered but not implemented is nevertheless the "inalienable" property of the person named as transferee in the Pension Sharing Order?
If so- the risk is that the member might die in the period between signing the Consent Order containing the pension share and the court issuing the Pension Sharing Order to the pension scheme - ie during the time when Decree Absolute has to be applied for if not already issued and the transferee completing and returning Form P1 the Pension Sharing Annex[es] to court so that the Pension Sharing Order can be issued to the pension scheme?

Just out of interest:
This is the first example I've found of a time limit set by the scheme's own rules for the recipient of a pension share to give to the pension scheme all the information it needs to implement the sharing - this scheme sets a 3 month deadline.
There's no specified time limit in the legislation.

www.dmgtpensions.com/Pensions_Tax/Credit_Divorce.asp

"Method of discharging liability for pension credit
If a pension sharing order is made, the Trustee will not offer the ex-spouse/partner benefits in the scheme. Instead, the Trustee will immediately discharge its liability for the pension credit by transferring it to another approved pension arrangement.
The ex-spouse/partner must choose an approved arrangement to which the pension credit should be transferred. A suitable arrangement must be chosen and the relevant discharge forms must be completed within three months of the effective date of the pension sharing order."
The next section confirms the pension scheme's right to decide if the recipient does nothing:
"In the absence of such an arrangement being chosen and advised to the Trustee within this timescale the Trustee will select another approved arrangement. In making such selection, the Trustee will have consulted its investment advisers and no commission will be paid. However, there is no guarantee that the approved arrangement selected by the Trustee will be the most appropriate."

Pays to check the scheme rules?
Just wondering if the Trustee would still be liable for any problems arising with their choice?

Hi,

Yes the dreaded default option! Another pitfall for the unwary. One of many when it comes to the implementing of pension sharing orders.

Interesting that in their haste to get this off the books they become the clients financial adviser! Although of course they accept no liability.

In my opinion, this illustrates that decent financial advice is needed not only at the start, but during and definitely at the end of a divorce!

To give this balance there are a number of schemes out there which offer a decent default option.

However, unless all the options have been reviewed how can you know if the option you are choosing is the most appropriate!

Regards

Phil