View from City Road: The pension issue is here to stay

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We already know roughly what's going to be in Peter Lilley's White Paper on pension law reform, expected shortly; not very much at all seems to be the hint from the Department of Social Security. Mr Lilley has apparently backed away from most of the Goode Committee's more radical proposals, including the creation of a fully fledged pensions regulator to monitor schemes and investigate complaints.

Presumably, then, the White Paper will also give short shrift to Professor Goode's recommendation that divorced people should have a statutory right to share their spouses' pensions.

Pensions and divorce have long been an explosive issue; attempting to meddle in this highly charged area could make the Child Support Agency fiasco look like a sideshow. Probably wisely, Mr Lilley has decided that this is a hot potato he could well do without.

It is, however, an issue that is not going to go away, and eventually something will have to be done about it.

At present, divorced people have few rights over a spouse's pension and the best they can hope for is often a discretionary payment from the trustees. Professor Goode wanted pension funds to calculate the value of a divorced spouse's pension rights and treat it as a normal transfer out of the scheme, rather like an early leaver.

In a recent Court of Appeal case, Brooks v Brooks, the terms of a man's pension were varied in favour of his wife so she could get part of it. However, lawyers say the grounds of this particular decision were too narrow to make a general precedent.

Clearly this is not one the Government can dodge for ever.