217 / 448
GAZETTE
JULY 1996
Pension Aspects of the Family Law Act,
1995
by Brian M. Gallagher
4
'
General
The benefits payable pursuant to a
pension scheme are determined by the
terms of the pension scheme and
cannot be shared or interfered with by
agreement between the member and
the trustees of the pension scheme. In
other words, the trustees who
administer the pension scheme are
bound by the terms thereof,
irrespective of what the individual
member wants. The individual
member cannot change the terms of
the pension scheme. Thus, for
example, if a pension scheme provides
that a pension is to be paid to the
member's spouse when the member
dies, there is nothing the member can
do to deprive his or her spouse of that
pension. It is therefore clear that
separating spouses cannot, by means
of a Deed of Separation deprive one
another of benefits under a pension
1
scheme, or divide those benefits
between them. A term in a Deed of
Separation which purports to do either
of these simply will not work.
Thus if the parties to a failed marriage
resolve all of their differences by
agreement they cannot have a
retirement benefit or a contingent
benefit to which either is entitled
earmarked or split without an order of
the Court pursuant to Section 12 of
the 1995 Act. This is, I believe, a
regrettable omission from the 1995
Act. Provision could have been made
for parties to a Deed of Separation to
apply to the Court pursuant to Section
12 for the Court to approve a Pension
Adjustment arrangement agreed
between the spouses and the trustees
of the pension scheme in question.
Section 12 of the Family Law Act,
1995 brings into Irish law for the first
time a procedure whereby a Court
may divide the benefits pursuant to a
pension scheme between spouses.
However it must be made absolutely
Brian Gallagher
; clear that Section 12 can only be used
as an ancillary order after the granting
of a Decree of Judicial Separation
under Section 2 of the 1989 Act. Thus
where separating spouses intend to
divide pension benefits they must not
execute a Deed of Separation,
because, if they do so, they will
deprive the Court of Jurisdiction to
make an ancillary order under Section
2, thus depriving the Court of
Jurisdiction to make an ancillary order
under Section 12. The recommended
procedure is, therefore, for the
separating spouses to mutually agree
the terms upon which they are
separating and then, if not already
issued, proceedings should be issued
under the 1989 Act, whereupon a
Court settlement can be executed
along the lines of the precedent and an
application made to the Court to have
the Court settlement received and
made a rule of Court and the relevant
ancillary orders made by the Court by
consent.
As will be seen, the Trustees of the
Pension Scheme will have to be put on
notice of the Court application. The
recommended procedure is, therefore,
| for the form of the pension adjustment j
order to be agreed between the parties
and the trustees of the pension scheme
prior to the application being made to
the Court for the consent Pension
Adjustment Order. The Court has
power under Section 12 (25) to direct
the trustees of the pension scheme
concerned to provide a calculation of
the value and the amount of the
j
retirement or contingent benefit
i
concerned that is payable under the
scheme. It is to be hoped that trustees
would provide such a valuation
without the necessity of an order
j
being made. I am hopeful that the
Pensions Board will issue guidelines
to this effect.
Thus, in the context of obtaining a
pension adjustment order by consent,
the recommended procedure is that
the parties obtain a valuation of
the benefit concerned and negotiate
its division between them. They
i
will require the aid of a pension's
consultant in this regard. Once
agreement has been reached
between the spouses they must
obtain the agreement of the trustees,
and the court application can then be
made. The trustees will of course
be on notice of the Court application,
but need not attend as there is
full agreement on all sides. Thus,
although the parties will have to pay
their own costs of making the Court
application, payment of the costs of
the trustees of the scheme may
be obviated.
It should also be noted that if spouses
who have entered into a Deed of
Separation subsequently become
members of Pension Schemes (which
they were not members of before the
Deed of Separation), then under
present legislation they cannot
exclude each other from acquiring
rights under new pension scheme.
Section 12 - Sub-section 2
Section 12 of the Family Law Act
1995 provides that where a Decree of
Judicial Separation has been granted
201