Family Law (Scotland) Act 1985

12A Orders for payment of capital sum: pensions lump sums.

(1) This section applies where the court makes an order under section 8(2) of this Act for payment of a capital sum (a “capital sum order”) by a party to the marriage or a partner in a civil partnership (“the liable person”) in circumstances where— (a) the matrimonial property or the partnership property within the meaning of section 10 of this Act includes any rights or interests in benefits under a pension arrangement which the liable person has or may have (whether such benefits are payable to him or in respect of his death); and (b) those benefits include a lump sum payable to him or in respect of his death. (2) Where the benefits referred to in subsection (1) above include a lump sum payable to the liable person, the court, on making the capital sum order, may make an order requiring the person responsible for the pension arrangement in question to pay the whole or part of that sum, when it becomes due, to the other party to the marriage or as the case may be to the other partner (“the other person”). (3) Where the benefits referred to in subsection (1) above include a lump sum payable in respect of the death of the liable person, the court, on making the capital sum order, may make an order— (a) if the person responsible for the pension arrangement in question has power to determine the person to whom the sum, or any part of it, is to be paid, requiring them to pay the whole or part of that sum, when it becomes due, to the other person; (b) if the liable person has power to nominate the person to whom the sum, or any part of it, is to be paid, requiring the liable person to nominate the other person in respect of the whole or part of that sum; (c) in any other case, requiring the person responsible for the pension arrangement in question to pay the whole or part of that sum, when it becomes due, to the other person instead of to the person to whom, apart from the order, it would be paid. (4) Any payment by the person responsible for the pension arrangement under an order under subsection (2) or (3) above— (a) shall discharge so much of the liability of the person responsible for the pension arrangement to or in respect of the liable person as corresponds to the amount of the payment; and (b) shall be treated for all purposes as a payment made by the liable person in or towards the discharge of his liability under the capital sum order. (5) Where the liability of the liable person under the capital sum order has been discharged in whole or in part, other than by a payment by the person responsible for the pension arrangement under an order under subsection (2) or (3) above, the court may, on an application by any person having an interest, recall any order under either of those subsections or vary the amount specified in such an order, as appears to the court appropriate in the circumstances. (6) Where— (a) an order under subsection (2) or (3) above imposes any requirement on the person responsible for a pension arrangement (“the first arrangement”) and the liable person acquires transfer credits under another arrangement (“the new arrangement”) which are derived (directly or indirectly) from a transfer from the first arrangement of all his accrued rights under that ; and (b) the person responsible for the new arrangement has been given notice in accordance with regulations under subsection (8) below, the order shall have effect as if it had been made instead in respect of the person responsible for the new arrangement; and in this subsection “transfer credits” has the same meaning as in the Pension Schemes Act 1993. (7) Without prejudice to subsection (6) above, the court may, on an application by any person having an interest, vary an order under subsection (2) or (3) above by substituting for the person responsible for the pension arrangement specified in the order the person responsible for any other pension arrangement under which any lump sum referred to in subsection (1) above is payable to the liable person or in respect of his death. (7ZA) Subsection (7ZB) applies where a right under an occupational pension scheme to payment of a lump sum in respect of death would, but for the provisions of Chapter 3 of Part 2 of the Pensions Act 2004 (c. 35), arise during an assessment period (within the meaning of section 132 of that Act). (7ZB) An order under subsection (3) shall not take effect until the assessment period comes to an end for a reason other than the giving of a transfer notice under section 160 of that Act. (7ZC) For the purpose only of giving effect to subsection (7), the court may deal with an order under subsection (2) so that it– (a) is addressed to the Board of the Pension Protection Fund instead of the person responsible for a pension arrangement; and (b) takes effect in respect of an entitlement to compensation payable under Chapter 3 of Part 2 of the Pensions Act 2004 or the Northern Ireland provision, instead of rights in relation to any lump sum referred to in subsection (1) which is payable to the liable party. (7A) Where— (a) the court makes an order under subsection (3); and (b) after the making of the order the Board gives the trustees or managers of the scheme a notice under section 160 of the Pensions Act 2004 (c. 35) (“the 2004 Act”), or the Northern Ireland provision, in relation to the scheme, the order shall, on the giving of such notice, be recalled. (7B) Subsection (7C) applies where— (a) the court makes an order under subsection (2) imposing requirements on the trustees or managers of an occupational pension scheme; and (b) after the making of the order the Board gives the trustees or managers of the scheme a notice under section 160 of the 2004 Act, or the Northern Ireland provision, in relation to the scheme. (7C) The order shall have effect from the time when the notice is given— (a) as if— (i) references to the trustees or managers of the scheme were references to the Board; and (ii) references to any lump sum to which the person with benefits under a pension arrangement is or might become entitled under the scheme were references to the amount of any compensation payable under that Chapter of the 2004 Act, or the Northern Ireland provision, to which that person is or might become entitled in respect of the lump sum; and (b) subject to such other modifications as may be prescribed by regulations by the Scottish Ministers. (8) The Secretary of State may by regulations— (a) require notices to be given in respect of changes of circumstances relevant to orders under subsection (2) or (3) above; (b) make provision for the recovery of the administrative expenses of complying with such orders from the liable person or the other person . (9) Regulations under subsections (7C)(b) and (8) above shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament. (10) The definition of “benefits under a pension scheme” in section 27 of this Act does not apply to this section. (11) In subsections (7ZC) to (7C) “the Northern Ireland provision”, in relation to a provision of the 2004 Act, means any provision in force in Northern Ireland corresponding to the provision of that Act.