Attachment of pension compensation: MCA 1973 s. 25F
Under section 25F, courts can order the Pension Protection Fund Board to pay a percentage of pension compensation directly to an ex-spouse.
25F This section applies where, having regard to any PPF compensation to which a party to the marriage is or is likely to be entitled, the court determines to make an order under section 23. To the extent to which the order is made having regard to such compensation, the order may require the Board of the Pension Protection Fund, if at any time any payment in respect of PPF compensation becomes due to the party with compensation rights, to make a payment for the benefit of the other party. The order must express the amount of any payment required to be made by virtue of subsection (2) as a percentage of the payment which becomes due to the party with compensation rights. Any such payment by the Board of the Pension Protection Fund— shall discharge so much of its liability to the party with compensation rights as corresponds to the amount of the payment, and shall be treated for all purposes as a payment made by the party with compensation rights in or towards the discharge of that party's liability under the order. Where the party with compensation rights has a right to commute any PPF compensation, the order may require that party to exercise it to any extent; and this section applies to any payment due in consequence of commutation in pursuance of the order as it applies to other payments in respect of PPF compensation. The power conferred by subsection (5) may not be exercised for the purpose of commuting compensation payable to the party with compensation rights to compensation payable to the other party. The power conferred by subsection (2) or (5) may not be exercised in relation to rights to PPF compensation that— derive from rights under a pension scheme that were at any time the subject of a pension sharing order in relation to the marriage, or a previous marriage between the same parties, or are or have ever been the subject of a pension compensation sharing order in relation to the marriage or a previous marriage between the same parties.
Text in force at .
Source: legislation.gov.uk — The National Archives (legislation.gov.uk), reproduced under licence Open Government Licence v3.0.
What it actually says
This section allows a court making financial provision orders on divorce or annulment to order the Board of the Pension Protection Fund to pay a portion of a party's compensation directly to their former spouse. The court order must state the required payment as a percentage of the compensation payment due.
Payments made directly by the Board discharge its liability to the compensated party up to the amount paid, and count as payments made by that party toward fulfilling their court-ordered maintenance obligations. If the party entitled to compensation has a right to commute part of it into a lump sum, the court may require them to exercise that right, though this power cannot be used to convert one party's compensation entitlement into compensation payable to the other.
This attachment mechanism cannot be used if the compensation rights derive from a pension scheme that was previously subject to a pension sharing order between the same parties, or if the rights themselves are or have been subject to a pension compensation sharing order between them.
When it applies
- A spouse seeking a percentage of their former partner's recurring Pension Protection Fund compensation payments following divorce.
- A court requiring a recipient of Pension Protection Fund compensation to commute part of their entitlement into a lump sum for direct payment to an ex-spouse.
- The Pension Protection Fund Board deducting an attached percentage from a compensation payment before remitting the remainder to the entitlement holder.
What this section does not say
- Splitting pension compensation into an independent separate entitlement, which is dealt with under mca1973s.24e.
- Attaching standard occupational or personal pension payments, which is governed by mca1973s.25b.
- General duties of the court when evaluating financial relief applications, which are set out in mca1973s.25.
Related sections
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This page reproduces the text of MCA 1973 s. 25F in force at the date shown and explains it in general terms. It is not legal advice and takes no account of the circumstances of your case, which can change the answer completely. For a live dispute, for limitation periods, and before taking any step in court, consult a qualified lawyer in England and Wales.