If a feature of globalisation over the past 30 years has been people working in different countries during their careers, it follows that many people may have pension assets in countries other than the one in which they make their permanent home.
That is certainly the case in England, where many pension assets are owned by people who no longer live here but who, if they divorce, may wish (or be required) to share them with their spouse.
Such pensions can, in principle, be shared, but English pension companies will only put a pension sharing arrangement in place if there is an English court order. Such orders invariably occur under Part III of the Matrimonial and Family Proceedings Act 1984 (MFPA) which allows for financial provision to be made here after a foreign divorce.
Not everyone can make use of MFPA. To be able to do so requires the applicant to be domiciled here or to have been habitually resident here for 12 months at the time the application is made or when the divorce was made. This is a significant limitation for anyone who has made their base abroad.
The possibility of using the MFPA to share English pensions was substantially expanded by a European Council regulation made in 2009 (after a lengthy gestation period), governing, inter alia, maintenance obligations and known colloquially among family lawyers as the Maintenance Regulation (MR). Article 7 of the MR provided a "forum of necessity" jurisdiction where no other country would be able to entertain a claim.
In 2013 a well-known English family lawyer, David Hodson, identified that this could assist people who needed to split an English pension but lived abroad and did not fall within the jurisdictional requirements of the MFPA. Accordingly, and for a happy few years, the MR bucked its otherwise rather grim reputation amongst family lawyers here by affording relief for pension owners in this difficult position.
Sadly, Brexit did for it. There had been a general recognition (including by the Law Commission in 2016) that MFPA should be amended to create an additional ground of jurisdiction where one party had an interest in a pension in this jurisdiction.
As part of this movement, as our exit from the EU approached, family practitioners specifically recommended to the Ministry of Justice (MOJ) that, in the context of EU exit discussions, we needed a substitute for Article 7 of the MR in our national law. The MOJ supported this in principle but said that there was no parliamentary time (even though it would presumably have gone through on the nod).
More infuriatingly, the MOJ explained that the EU exit legislation could only deal with areas where EU law had replaced national law. As we had not had a "forum of necessity" jurisdiction before the MR, it was not a priority to provide for it once it no longer applied to us. The fact that it would be useful presumably counted for nothing.
As a result, when the transition period ended on 31 December 2020, we ceased to have the benefit of Article 7 of the MR and all the convenience that it afforded. Accordingly, in many cases it will simply not be possible for some English pensions owned by people divorcing abroad to be split.
If that is recognised during the discussions leading to a financial agreement and resulting court order, other financial arrangements can probably always be made. However, if an order is made, in the expectation that an English pension share will be is possible, this might need to be unpicked with all the problems that that might bring.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
