Transfer Values

38. One of the critical issues raised by pension sharing is the calculation of the value of the pension rights of each of the partners in the marriage, in a way that allows pension rights to be taken into account along with the other assets of a married couple. The Government's intention is that Regulations to be made under Clause 5 (1) will require that normally the cash equivalent transfer value (CETV) will be used as the basis for assessing accrued rights.[129] A CETV is a payment between two approved pension schemes or arrangements. It represents the current cash value of a leaving service benefit. A pension scheme pays a CETV in lieu of paying the future pension benefit. The CETV is "a well-established method for valuing [the pension rights] of early leavers from occupational pension schemes or members of personal pension schemes who wish to transfer their accrued rights to another pension scheme or arrangement".[130] The CETV is not the only available valuation method and evidence to us highlighted a small but important number of cases were the CETV would be inappropriate.[131] These included —

• cases involving the exclusion of discretionary benefits;[132]
• pension schemes that were underfunded;[133]
• schemes where retirement age from active service was lower than for deferred entitlements (e.g. police, fire, armed forces).[134]

1. Mr John Denham told us that in his judgement "we do not have a better [valuation method], though we can always point to flaws in it".[135] The Association of British Insurers agreed that CETV was "the best of a bad job".[136] For the Law Society, Mrs Hilary Siddle's view was that the CETV was "the best we have and ... the most practical solution"[137] and Mr Robin Ellison described the CETV as "cheap and cheerful".[138] Mr Sax of the Solicitors' Family Law Association thought that "we should stick with the CETV".[139] Mr Robb of the Law Society of Scotland told us he had "reservations"[140] about the CETV based on his experience of the higher values generated by the continuing service method which had previously been used on Scotland: "all I am conscious of is that I understand CETV to be at the bottom end of the possible reasonable valuations of pensions".[141] Several other witnesses recognised that the CETV would not be suitable in all circumstances.[142] Mr Slack of the Faculty and Institute of Actuaries warned against the cost, complexity and delay that would be entailed if legal advisers sought independent actuarial advice, which might nevertheless be justified in particular circumstances:

"Sticking to the pure cash equivalent gets rid of all that administrative cost but one of the down-sides is going to be that in certain schemes it will be a fairly material under-estimate of a different package of benefits than might have been appropriate."[143]

2. We recommend that the courts should be given a limited discretion to cater for circumstances where serious anomalies would arise from the rigid use of a standard cash equivalent transfer valuation (CETV) of pension rights.

3. Women who get divorced could suffer a "double whammy"[144] because CETV calculations usually involve sex specific mortality assumptions.[145] A CETV calculation for a husband is dominated by male mortality. The fact of life is that as women generally live longer than men, pensions for women therefore cost more. An equal capital split of a CETV would therefore not result in equal emerging income for two parties of the same age.[146] This effect will be exacerbated by the average age difference between divorcing spouses, men being on average three-to-four years older than their wives. It is important that courts and family lawyers should fully appreciate the 'income effect' of an equal capital split of the pension asset.

4. A number of technical issues about CETV methodology remain to be resolved, either in the Regulations envisaged under Clause 5 of the draft Bill or (more probably) in revised guidance to be drawn up by the actuarial profession.[147] As highlighted by the Society of Pension Consultants[148] and NAPF[149] the typical CETV will be made up of several tranches of benefit. Typically pre- and post-1988 guaranteed minimum pension rights (GMPs) will be involved together with post-April 1997 protected rights.[150] In addition many schemes will include allowance for early uplift of pension for some period of service as a result of the Barber sex equality case.[151] Complexity is an understatement! Quite separately, actuarial guidance will need to be extended to provide consistent and workable values to those with pensions in payment.[152] It has been suggested that an element of simplicity would be introduced by basing the secured transfer credit on post-April 1997 accruals only.[153] We recommend that the Government should simplify the pension credit by requiring that the inflation-proofing of all its elements should be provided only in the form of the limited price indexation which is applied in any case to any increases in pension rights after April 1997.

Costs

5. Divorce is a time consuming, stressful and expensive exercise. Adding pensions to the equation will not simplify matters or reduce costs. Standardising procedures and information forms as suggested by the DSS [154]and roundly endorsed by the ABI,[155] NAPF[156] and lawyers[157] will help greatly to simplify matters and minimise costs. Throughout the evidence reference was made to the 'reasonable costs' of pension providers in providing values and effecting pension shares.[158] The Occupational Pensions Advisory Service (OPAS) suggested that this provision could "become the source of a large volume of disputes."[159] The initial quotation of pension values should not extend the existing 'burden' of gratis CETV quotation (once a year). The initiative of the NAPF in setting a standard scale of charges[160] is welcome. We recommend that the jurisdiction of the Pensions Ombudsman should be extended to enable him to rule on the reasonableness of pension sharing costs charged by pension providers.[161]

6. Simplified or standardised literature explaining the pension choices will also assist in the necessary advice requirements. Currently the DSS are probably best placed to prepare such a leaflet utilising the assistance offered by most bodies in the industry who volunteered further help. The Pension Provision Group however envisaged a body to illustrate future benefits (in real terms) and such a body in conjunction with the new Financial Services Authority may be able to steer or advise divorcing couples in this regard. Presently, however, 'choice' means authorised investment advice is required and this requires remuneration. We recommend that the Department should work with interested parties to develop standardised forms for the disclosure of information associated with the calculation of a CETV.

Personal Pensions

7. Personal pensions were introduced in 1988 and facilitate 'contracting out' of SERPS on an individual basis. They allow 'retirement' (or more precisely receipt of benefits) from age 50 onwards. Death benefits generally reflect a 'return of fund'. At retirement there is facility to 'draw down' variable income or secure 'managed' and 'phased' retirement benefits. Personal pensions sit alongside historic retirement annuities under Section 226 of the Finance Act 1956. The tax relief regime of personal pensions is relatively simple, contributions being allowed on relevant earnings at a rate of between 17.5 per cent and 40 per cent of earnings, depending on age. The draft pension sharing legislation would not impose any restriction on future contributions to a personal pension as a result of a pension share — in contrast to the benefit restriction regime of occupational schemes.

8. The most notable social and political aspect of personal pensions was the mis-selling of contracts to members (and potential members) of occupational pension schemes. Compensation now estimated at £10 billion is being arranged for almost 2 million people.[162] This mis-selling has significantly affected the image of the pensions market and the life assurance industry. While the highest standards of professional advice should be required by the Financial Services Authority regulations, it should be noted that changing financial circumstances are likely to produce subsequently results different from those anticipated.

9. Pension sharing will bring a potential new group of policyholders into the market. Divorcing spouses will initially be considering their pension share in capital terms, with limited or no understanding of the level of real income secured. Mr John Denham looked forward to the stakeholder pension schemes "which are specifically designed to have good value for money options and to be benchmarked [as] meeting those minimum criteria".[163] The Association of British Insurers assured us that the personal pensions industry had learnt a great deal from the mis-selling which took place after 1988, and that a much stronger regulatory regime was now in place.[164] The use of sales commissions rather than fees would persist until consumers "appreciate that if advice has got a value then it also has a cost."[165] Ms Joanne Segars of the Trades Union Congress told us: "there are important lessons to be learned from the past. What we need to make sure on pension splitting is that they are not repeated ... the former spouse will need very good financial advice."[166] There is a significant danger of pension share transfers being mis-sold, of valuable occupational pension scheme benefits being given up and potentially cheap and simple occupational pension scheme and other alternatives being ignored. We recommend that the new Financial Services Authority should impose a strict regime for the illustrative projections of benefits emerging from transfer credits and for complete transparency of the structure and level of commission or other charges for financial advice.

10. The possibility of putting personal pensions into payment from age 50 may prove an attractive alternative to maintenance/aliment. At any time after the age of 50, up to a quarter of the personal pension fund can be taken as tax free cash, with the remainder used to buy an annuity, from which the income will be taxed as earnings.[167] This feature of personal pensions may encourage former spouses to prefer taking a pension credit to the other options available.[168] We recommend that the Department should monitor the pensions credits available to, and options chosen by, former spouses and the extent to which personal pensions purchased with pension credits are encashed before normal retirement age.

Company Pension Schemes

11. Occupational schemes in the UK include defined contribution (money purchase) and defined benefit (final salary) arrangements. Schemes cover public and private sector employees. Benefit promises may be funded or unfunded and can be provided on an approved or unapproved tax basis. A company pension is generally the most valuable 'benefit in kind' provided. A crucial practical aspect is that company schemes are voluntary.[169] We recommend that the financial and administrative impact on occupational pension arrangements of occupational pensions legislation and family law should be minimised.

12. The DSS has given detailed consideration to the calculations of pension credits and debits. A defined benefit scheme will record the scheme member's debit as a negative transfer out. The former spouse's credit may be secured as either a defined benefit or as a money purchase entitlement. Schemes may wish to utilise an AVC (additional voluntary contribution) type facility for this latter alternative. We recommend that the Department should consult the Financial Services Authority and the relevant interested parties on the practical steps that may be taken to ensure that a suitable investment vehicle or benefit structures are made available to former spouses.

13. UK occupational schemes are encouraged by government with tax deferral — the tax relief granted on contributions is not recovered until pensions in payment are taxed as earned income.[170] There is a plethora of Inland Revenue rules designed to restrict the excessive build up of tax approved benefits.[171] Only 1 per cent of occupational scheme members attain the maximum two-thirds final salary pension.[172] The explanatory notes for the draft Finance Bill Clause and Schedule state that the pension credit rights of a former spouse will continue to count under tax rules as those of the employee scheme member and that "this will maintain fairness between all scheme members since the tax approval rules do not distinguish between scheme members on the basis of their marital status."[173] The NAPF said that they were "disappointed"[174] the Government had departed from its stated policy intention of achieving a clean break by not allowing scheme members fully to rebuild their rights following a pension share, and they recommended that the pension scheme member should, at least, be allowed to pay contributions up to the maximum (15 per cent) level, regardless of benefit limits.[175] The former spouse will have the pension credit in addition to their own Inland Revenue maximum, which will not be affected.[176] In their written evidence Professor Heather Joshi and Dr Hugh Davies gave their opinion that this proposal did not seem to be fair,[177] and the Occupational Pensions Advisory Service (OPAS) also commented on the proposal's "unfairness".[178] The National Association of Pension Funds described it as "rather illogical".[179]

14. The National Association of Pension Funds estimated the total extra tax relief as a result of rebuilding would amount to some £4 million a year offset by the tax paid on the additional pension earned once it came into payment.[180] Mr John Denham pointed out that only a small number of people would be affected in practice and, assuming they came up against the reduced limit as a result of a pension share and still had money they wished to save for retirement, a number of other tax efficient mechanisms such as the ISA would be available; and he questioned whether it would be justified to give extra tax privileges to someone who was divorced that were not available to other married couples and individuals.[181] We are concerned that if people are not allowed to re-build their pension after a pension share that in certain cases it may influence lawyers and the courts against sharing pensions and lead them to deal with pension provision by other means, such as offsetting. It may also lead to public hostility from those adversely affected. Abuse of offsetting could be avoided by excluding its application to high earners. We understand the Government's concern to avoid discrimination. Two unmarried individuals each enjoy maximum tax relief in building their position. After divorce, the couple revert to being two individuals. If there is a discrimination, it is between individuals (whether divorced or never married) and married couples. The Government's best estimate of the cost of total extra tax relief if the reduction were not imposed following a pension share was £1 million in the first year, rising to some £15 million a year after 25 years.[182] We recommend that the provisions of the draft legislation imposing a reduced ceiling on contributions to an occupational pension scheme following a pension debit should be dropped.

15. The death benefit protection of a 'return of fund' and availability of income at age 50 will be significant attractions to transfer out of an occupational pension into a personal pension. From a scheme's point of view the transfer out will also be attractive, in reducing administration and not creating a new class of member. Whilst the NAPF may be influential in guiding the practice of the larger schemes[183] the smaller schemes may prefer to encourage former spouses to accept a transfer.

Pensions in payment

16. Relatively few of the 180,000 divorces per annum involve pensioners. Extending pension sharing arrangements to those over retirement age would be technically complicated,[184] but may be appropriate in certain circumstances. The Faculty and Institute of Actuaries raised a concern that a scheme member in serious ill-health would be able to increase the benefit payable to a spouse by divorcing before death.[185] The Association of British Insurers pointed out that the value of a pension in payment could be given to the court, but they would want to reserve the right to re-assess the medical condition of the scheme member and the former spouse before the implementation of a pension share.[186] We recommend that pension providers and insurers should have the right to request medical evidence in respect of the sharing of pensions in payment.

Further marriages

  17. The Institute and Faculty of Actuaries told us it was not clear how a pension credit will be treated following further marriage and divorce of either a scheme member or the former spouse.[187] This problem should not arise under Scottish law, where only property acquired during the marriage is taken into account by the court. We recommend that the monitoring of pension sharing arrangements should address any particular problems emerging from further marriages.

Small Self Administered Schemes

18. One very special and complex type of occupation pension scheme is the small self administered scheme (SSAS). Special Inland Revenue rules apply to these schemes which are few in number but may involve substantial sums of money. A forerunner of pension sharing was the leading case of Brooks v. Brooks,[188] in which the former spouse was held to be entitled to a share in the scheme member's small self-administered scheme because it was in effect a post-nuptial settlement.[189] Paragraph 2(2) of Schedule 1 to the draft Pension Sharing Bill will prevent Brooks-type orders being made in future.[190] In small entrepreneurial companies or partnerships SSASs may invest their assets in the company or partnership and all the members of the scheme are effectively required to be trustees. These schemes could well find it difficult to admit former spouses as deferred members.[191] There may be a case for introducing special provision for SSASs to retain their special status without requiring the former spouse to become a trustee, provided that the former spouse's rights were sufficiently safeguarded. There may also be a case for amending the pension sharing order timescales to cater for the particular scheme assets, which may be difficult to realise.

Unapproved schemes

19. The Association of Pension Lawyers pointed out that further technical changes would be necessary to the proposals in the draft Bill governing unapproved schemes.[192] Although such unfunded unapproved retirement benefit schemes (UURBS) and funded unapproved retirement benefit schemes (FURBS) are few in number, they present a further layer of complexity for lawyers handling the divorce.

SERPS

20. The basic State Retirement Pension provides credit for the spouse during marriage and does not therefore require to be taken into account in the sharing process. Divorcing couples will need to obtain from the DSS Benefits Agency a valuation of their SERPS rights.[193] Transfers out will not be available; entitlement will be given instead to a "shared additional pension".[194] The DSS estimates the administration costs for setting up and administering the sharing of SERPS to be around £5 million in the first year and less than £2.5 million a year (at current prices) in the longer term.[195] SERPS will only be shared if neither party to a divorce has non-State pension rights.[196] Regulations to be made under Section 32(4) of the draft Bill will contain a table set by the Government Actuary (based on actuarial factors such as sex and age) to be applied when calculating the cash equivalent of a SERPS entitlement.[197] The scheme member and the former spouse will not be charged for the administrative costs of applying a pension share to a SERPS entitlement.[198] The administrative challenges faced by the DSS in preparing for pension sharing, including the introduction of the new National Insurance Recording System (NIRS 2) should not be under-estimated.

Time scales

  21. Some of the periods laid down in the legislation have been criticised as being unduly harsh. For example, the National Association of Pension Funds suggested that small schemes could find it difficult to implement a pension share within four months.[199] We recommend that further consideration should be given to the time limits allowed for each stage of the pension sharing process to ensure that the proposed statutory limits are reasonable, fair and achievable.

Unfunded Public Service Schemes

22. Paragraph 2 of Schedule 2 to the draft Bill provides that for unfunded public service pension schemes a pension credit may be exercised only in the form of appropriate rights in the scheme; there is no option of taking a pension credit into another pension arrangement.[200] Other unfunded pension schemes are allowed to give appropriate rights instead of paying the amount of the credit into another pension arrangement, even against the wishes of the former spouse.[201] This latter provision appears to offer sensible protection for small private sector unfunded schemes which might otherwise be disrupted by the liability to pay out a pension credit. For the public service schemes, however, the draft Bill places an outright ban on paying out pension credits as transfers to other schemes.

23. The Government has indicated that work is continuing on the details of the 'former spouse packages' in public service schemes, which could include some death benefit provision for the former spouse.[202] Further consideration needs to be given to what rights the new category of former spouse member should have to nominate a recipient of a survivor's benefit in the event of the former spouse's death before drawing the pension.

24. Mr John Denham told us that the implications for the Exchequer of allowing pension credits to be taken out of unfunded public service schemes would be "quite significant"[203] and that it could amount to bringing forward up to £190 million of public expenditure in the first year.[204] A subsequent written paper from the DSS elaborated the assumptions and judgements made in estimating the potential maximum cost of former spouse transfers from unfunded public service pension schemes.[205] The figure of £190 million is the estimate of the potential cost in the first year, on the basis (i) that pensions are split in 50 percent of cases and (ii) that in every case where a pension is split the former spouse takes their transfer share out of the scheme.[206] Mr Denham pointed out that "less than 2 per cent of early leavers of unfunded public sector schemes actually exercise any right to transfer out of their schemes"[207] but the written submission prepared by the Treasury[208] was unfortunately unable to provide complete figures on the numbers of individual transfers out of public service pension schemes taken by early leavers. From the available partial information, there is little evidence to contradict the Minister's own view that "it is very difficult to see how the former spouse would generally be disadvantaged by the requirement to take up deferred membership of the unfunded public sector scheme".[209] Mr Denham admitted that the argument over whether to allow transfers of pension credits might be "somewhat theoretical"[210] since in most cases former spouses would be well advised to retain deferred membership of a public service pension scheme. This denial of choice to former spouses contrasts with the availability of transfers for early leavers.[211] The TUC told us that this was "one of the few areas where we are not happy with the proposals of the draft Bill"[212] and they argued that at the very least people should be able to take transfers to another public service scheme if they already had an entitlement there.[213] A similar approach was put forward by Fairshares[214] and the Minister assured us he would reflect upon it.[215] Families Need Fathers suggested that a possible solution might be to allow an former spouse to trade in a pension credit from a public service pension scheme for enhanced rights in SERPS.[216]

25. We are not convinced that the evidence presented to date justifies discrimination against the former spouses of fire-fighters, teachers, soldiers, civil servants, nurses, police officers and others covered by the public service schemes.[217] In the wider context of contracting-out of SERPS, the Treasury rebates some £7 billion[218] of National Insurance contributions each year in order to reduce future expenditure on additional pensions. Any pension credits taken out of the public service schemes are balanced by a reduction in the liability to pay pensions in the longer term,[219] in addition to the savings in administrative costs from not having to keep track of the former spouse who makes a clean break with the pension scheme. While we agree with Mr Denham on the need to be "sensible and sensitive about the protection of public money",[220] we would not want to close the door permanently on allowing former spouses to take transfers out when it would be to their advantage. We recommend that the Bill should be amended to extend to former spouses of members of unfunded public service schemes the same rights of choosing how to take a pension transfer as will be available to former spouses of members of funded schemes.

130   Consultation Document Pension sharing on divorce: reforming pensions for a fairer future (DSS June 1998) Part 2:draft legislation, Explanatory Notes on the draft Pension Sharing Bill, page 9 (Clause 5). Back

131   Professor Heather Joshi and Dr Hugh Davies argued in their written evidence that the expected discounted present value should be laid down as a unifying principle for all pension valuations. Appendix 18 paragraph 4.6. Back

132   Q.459. Back

133   Ev.p.88, Q.460. Back

134   Q.425, Q.457. Back

135   Q.38. Back

136   Q.196. Back

137   Q.325. Back

138   Q.326. Back

139   Q.380. Back

140   Q.420. Back

141   Q.420. Back

142   Q.325-6, Q.425, Ev.p.101-2, paragraphs 2.1 to 2.3. See also written evidence from the Association of Pension Lawyers Appendix 5 paragraph 3.1. Back

143   Q.457. Back

144   Solicitors' Family Law Association Appendix 9 paragraph 13.1. Back

145   Q.379. Back

146   See Appendix 2 Annex D and letter to the DSS from Mr Brian Arrighi Appendix 19. Back

147   See Appendix 7 Law Society of Scotland page 173. Back

148   Appendix 11.  Back

149   Appendix 13. Back

150   Appendix 5 page 151. The Society of Pension Consultants suggested a simpler process which would not require the GMP to be split - see Appendix 11. Back

151   Barber v Guardian Royal Exchange Insurance Group, ECJ Case C-262/88 [1991] 1 QB 344. Back

152   See paragraph 61 below. Back

153   Ev.p.87-8.  Back

154   Consultation Document Pension sharing on divorce: reforming pensions for a fairer future (DSS June 1998) Part 1:consultation Chapter 4 paragraph 12 Back

155   Ev.p.41 paragraph 2.12, Q.228. Back

156   Appendix 13 paragraph 5.2. Back

157   Q.347. Appendix 5 page 148. Back

158   Q.28, Q.31, Q.48, Q.53, Q.164, Q.204, Q.349, Q.406, Q.472, Q.577-8, Q.593; Ev.p.113-4 paragraph 14. Back

159   Appendix 17 paragraph 2 (a). Back

160   Q.164. See also Q.33, Ev.p.31 paragraph 32 and Appendix 13 paragraph 8.4. Back

161   Q.23, Q.349, Q.452, Appendix 9 paragraph 14.1. Back

162   Financial Services Authority and Personal Investment Authority Consultation Paper No.7, March 1998 paragraph 38 gives figures based on research carried out for the FSA by Price Waterhouse totalling 2,230,00 cases with estimated total losses of £10.17 billion.  Back

163   Q.33. Back

164   Q.192. Back

165   Q.194. See also evidence from the Institute and Faculty of Actuaries Q.448-9. Back

166   Q.477. Back

167   This facility is not available for occupational pension schemes (Inland Revenue Pension Schemes Office Practice Notes IR 12 paragraph 6.1). Back

168   Q.624. Back

169   Q. 53. Back

170   Consultation Document Pension sharing on divorce: reforming pensions for a fairer future (DSS June 1998) Part 2, Finance Bill draft Clause and Schedule, page 1, paragraph 5. Back

171   ibid., paragraphs 6-7 and 13. Back

172   According to NAPF figures quoted by Mr Denham, Q.632-3. Subsequent written evidence from the DSS suggested that the current figure was 5 per cent and after pension sharing might rise to as much as 10 per cent - Ev.p.138. Back

173   Consultation Document Pension sharing on divorce: reforming pensions for a fairer future (DSS June 1998) Part 2, Finance Bill draft Clause and Schedule, page 3, paragraph 15. Back

174   Ev.p.30 paragraph 7. Back

175   Ev.p.30 paragraph 8. The Institute and Faculty of Actuaries suggested that a special type of free-standing Additional Voluntary Contribution regime might be established to enable scheme members to rebuild their pension - see Annex to Appendix 10. Back

176   Q.62-3. Appendix 17 paragraph 1(e). Back

177   Appendix 18 paragraph 7.1. Back

178   Appendix 17 paragraph 1 (e). Back

179   Q.151. Back

180   Appendix 14. Back

181   Q.630. Back

182   Ev.p.140. Back

183   Ev.p.30-31 paragraph 13. Back

184   Appendix 9 paragraph 17. Back

185   Ev.p.87. Back

186   Q.198-9. Back

187   Ev.p.88. Back

188   [1995] 3 WLR 141. Back

189   Ev.p.50-51; Q.238. Back

190   Ev.p.52. Appendix 6 paragraph 3.22(b), Appendix 9 paragraph 10. Back

191   Appendix 11, pages 60-61. Back

192   Appendix 5 paragraph 8.1. Back

193   Consultation Document Pension sharing on divorce: reforming pensions for a fairer future (DSS June 1998) Part 1:consultation, page 14, paragraph 9. Back

194   ibid., page 17, paragraph 22. Back

195   ibid., Annex B Regulatory appraisal page 29, paragraph 14 and page 30 Table 2. The administrative costs also include administration of guaranteed minimum pension (GMP) amounts for occupational pension rights acquired before April 1997. Back

196   ibid., page 34, paragraph 4. Back

197   Consultation Document Pension sharing on divorce: reforming pensions for a fairer future (DSS June 1998) Part 2: draft legislation, [draft] Explanatory Notes on the Pension Sharing Draft Bill, page 26. Back

198   Q.72. Back

199   Ev.p.31 paragraph 15. Back

200   Pension sharing on divorce: reforming pensions for a fairer future (DSS June 1998) Part 2:draft legislation, Explanatory Notes pages 32-3. Back

201   ibid., page 33 and paragraph 3 of Schedule 2. Back

202   Appendix 2. Back

203   Q.55. Back

204   Q.56, Q.617-9. Back

205   Ev.p.136-8. Back

206   ibid. Back

207   Q.55. Back

208   Ev.p.123. Back

209   Q.55. Back

210   Q.622. Back

211   Q.480-2. The Staff Side of the Police Negotiating Board suggested that a former spouse should be entitled to take a credit out of the scheme if the police officer chose to take a transfer value on leaving the service - thus allowing the former spouse to have a clean break from the scheme member's former employer, without adding to the effect on public expenditure - DSS 6 paragraph 7. Back

212   Q.479. Back

213   Q.479. See also PS 34 TUC submission to DSS consultation (available from Congress House price £2) Section 4 for the TUC's written comments on Clause 12. The Irish Congress of Trade Unions Northern Ireland Committee also recommended that the restriction relating to unfunded pension schemes be removed - DSS 80 section 3 comments on Clause 12. Back

214   Q.519. Back

215   Q.623. Back

216   Q.575. Back

217   Appendix 7 page 34 Law Society of Scotland; Ev.p.115 paragraph 18 (vi) Families Need Fathers. Back

218   Q.627-629. Back

219   In July 1998 the Treasury published a report which discusses plans to set out public service pension liabilities in a national balance sheet by 2005-06. See Whole of Government Accounts HM Treasury, July 1998 paragraphs 3.32 to 3.40. Back

220   Q.622. Back