My ex-wife is chasing me for £20k over a botched pension sharing order

i had a dormant pension with a large pension firm, on which my ex-wife received a pension-sharing assignment for the past ten years of just under a third of its value.

All the paperwork was properly filed on my end, but it has recently become apparent that my ex has not completed the necessary documentation to properly enforce the warrant, something I was unaware of.

A few years ago, I asked for a settlement amount from the retirement firm, paid the required tax, and took the lump sum — which I assumed was my wife’s percentage deducted.

I was recently approached by my old attorney who handled the messy divorce. He told me that years after the draft decision was submitted to them, my ex had contacted him and the pension company, asking for her percentage.

The pension company confirmed that a draft warrant was filed by my attorney, but not by my ex, and that the money paid to me does not include her share.

It has admitted a data protection breach by talking to my ex without my consent, but says it is not guilty of paying me out in full. It said it has ‘followed its process’ which has me currently being chased for £20,000 I don’t have by my ex.

Any advice is appreciated.

Tanya Jefferies, from This is Money, replies: You’re really in a tough situation. We have asked a senior and highly experienced lawyer to explain your options, if your ex-wife pursues this with you.

He also looked at the issue of the pension company, and whether you or ex can make it pay instead of you.

Should your wife take legal action, it is wise to hire a lawyer if you have not already done so.

If you don’t want to use your previous lawyer because you prefer to take a fresh look, you can look for one on the The Law Society website here.

Rhys Taylor is a lawyer specializing in marriagesaI fund claims practicing from The 36 Group Chambers in London. He is also the co-author of Pensions on Divorce: A Practitioner’s Guide.

What normally happens when divorcing couples place an order for pension division?

Provided that a divorce is finalized with an absolute decision, pension sharing decisions become ‘effective’ by operation of law on the so-called transfer day.

The day of transfer is reached on the last day of the decree absolute, or 28 days after the court approves the financial order.

The pension share takes effect on the day of transfer, even if it still has to be executed.

It’s not a perfect comparison, but think of transfer day as exchanging contracts for a home.

Completion has yet to take place, but a buyer has some enforceable rights from that day.

In order to implement an effective pension distribution decision, the parties must provide the pension administrator with the required documents and, if the administrator so requires, pay any agreed fee.

Once these necessary formalities have been met, the pension manager will enter the ‘implementation period’.

This gives it four months to take the “inchoate entitlements” – in simple terms, the entitlements to the pension share that are still in progress – from the transferor’s pension fund and send them to the new destination pension fund.

I’m not entirely clear from what you’ve written where you’ve come to in this process. It sounds to me like you are likely to arrive on transfer day, but since your wife has not returned what was needed, the implementation period has not started.

The legal status of a pension share between the transfer day and the start of the execution period is not entirely clear.

As I said, your wife has a number of rights analogous to those that the buyer of a house with exchanged contracts may have.

What legal action could your ex-wife take now, and where are you?

Your wife may go back to family court. She can say that she has not had her pension part.

The court can review the court order and see if there are any other outstanding claims (for example, for periodic payments or for a lump sum payment) for which it could issue an order demanding an amount instead of its percentage in the pension order to share.

However, if all other matrimonial claims have been dismissed, the scope of the family court for further interference is extremely limited and legally contentious.

There is disputed jurisdiction (some judges say it is possible, others don’t) for the court to amend an “executive order” – an order that has been issued but has yet to be executed for whatever reason.

Some might say that if you have a different pension fund then it is permissible to ‘vary’ the enforceable title to apply to a new pension, but expert actuarial advice may be needed as to what percentage may apply to it new fund.

Others would say that this is simply not possible and that a judge should not hear the claim. I’m sorry this is far from clear, but this is the state of affairs.

Sometimes a late appeal is possible and there are special provisions to object to a pension distribution decision in some circumstances.

However, from a procedural point of view, the time limits for applying for leave to appeal are 21 days from the date of the order, and the court would likely allow an appeal years late unless there was a very good reason for the delay.

My guess is that if all other claims in the court order are dismissed, it’s unlikely anyone could successfully try to disrupt it unless both parties have an agreed-upon way to go to court.

From your point of view, this means you probably won’t have to pay your wife the percentage of your pension fund that was agreed upon in the original pension split decision, at least through this legal route.

You and your ex-wife are of course free to come to an agreement yourself. In view of the fact that it has not performed the assignment properly, it may be willing to agree on a lower lump sum payment or, conversely, payment in installments.

And if you still have pension assets, if you agreed, it would be possible to make a pension distribution decision about another pension fund – but not the fund that was originally subject to the pension distribution decision that was not enforced.

You cannot have two pension distribution orders for the same pension in relation to the same marriage.

However, if you disagree, these avenues can be extremely difficult for your ex-wife to pursue.

Can the pension provider be forced to pay your wife her pension share?

You or your ex-wife may also consider filing a complaint with the Ombudsman Pensions.

It is likely that the pension administrator should not have given you permission to pay out/transfer your pension if he was fully aware of the pension sharing scheme that has come into effect.

If for some reason the transition day has not been reached – for example, the absolute decision was only granted after you had withdrawn the pension, or the trustee was not informed – the situation may be different.

But if the trustee knew that it was the custodian of effective pension sharing, the Pensions Ombudsman might consider ordering the pension fund to compensate your wife for the loss she suffered.

It is then a matter between you and your old pension provider whether they can reclaim money that you should not have had.

Now if you’re a man of straw – meaning you don’t have the resources to make it worth suing – that’s not going to happen.

However, if you have other assets, you should consider the terms of your contractual relationship with the pension company to determine whether you are liable for any repayment.

There is simply nothing your pension company can do if the cost of the dispute is disproportionate to the amount of money they hope to recover from you.