Emergency Legislation required for Death in Service Pension Orders
The recent implementation in Ireland of the European IORP II Directive by the Pensions Authority has created a very serious problem for beneficiaries of pension orders in relation to judicial separation or divorce court orders.
When parties to a separation or divorce reach an agreement in relation to pensions one of the orders that is usually obtained is what is called a contingent benefit or death in service order.
As a result of the implementation of this EU Directive there has been a large scale and market wide movement of private sector defined contribution occupational pension schemes to a number of Master Trusts. The Trustees of the Master Trusts have taken the position that, by virtue of the fact that they are no longer the same entity as the pension scheme over which contingent orders were made in family law proceedings, they do not intend to honour contingent (death in service) orders made in family law orders.
This could mean that a dependent wife could be left without the benefit of a substantial lump sum payment which may be required to replace maintenance that she may have been receiving from the father of the children. This could leave the dependent wife in a seriously precarious financial position.
The Law Society has intervened and the Director General has written to the Minister seeking amending legislation as a matter of urgency to correct the situation and it would appear that some progress is being made in order to correct this injustice.
For further information on this or any other family law matter please do not hesitate to contact Brendan Dillon, Erika Coughlan or Aoife Cathcart on 01 296 0666.
