Emergency legislation needed to protect divorcees from losing pension payments

Emergency legislation needed to protect divorcees from losing pension payments

Keith Walsh

Emergency legislation is needed to prevent thousands of divorcees from losing hundreds of thousands of euros in payments as a result of changes to EU law, the Law Society of Ireland has said.

The Law Society today said it has alerted the Pensions Authority and practitioners to the serious effect of new EU pension legislation on death-in-service benefits for former spouses.

According to the Law Society, a “large-scale and market-wide movement of private sector defined contribution occupational pension schemes to master trusts is currently underway” as a result of increased compliance obligations for trustees of occupational pension schemes.

However, no payment will be made to the beneficiary of a contingent benefit pension adjustment order on the death in service of a member of a scheme which has moved to a master trust.

The Law Society said the issue “is of such severity that emergency legislation is required”.

Leading family law solicitor Keith Walsh told Irish Legal News: “Due to the movement of pension funds to a new master trust scheme following a new EU law, pension orders made to benefit divorced spouses in relation to death-in-service pension benefits will now be set at nothing.

“This problem can be resolved by the Pensions Authority issuing guidelines and the introduction of emergency legislation. The Law Society has drafted this legislation and is calling upon the Pensions Authority and government to take immediate action.”

He added: “This is a problem that can be resolved but if it is left without action, it will have very serious consequences.

“These death-in-service benefits are quite often made as part of divorce settlements by the court to provide security for maintenance, i.e. to protect the spouse and children should one of the spouses die and so deprive the family of maintenance or care.”

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