pension sharing costs

zazab

Hi
Can anyone help me please. My partner is divorced and there has been a pension sharing order whereupon the scheme has now dishcharged liability at no cost. His ex has had an external transfer to a pension of her choice. She is now expecting my partner to pay for half of the commission that she says she is being charged by her scheme (his half being £1200.00) Can this be right???? I thought the whole point of pension sharing was to facilitate a clean break, and I thought clean break meant she could not get anything more from him after the absolut.

dunstonh

She is now expecting my partner to pay for half of the commission that she says she is being charged by her scheme (his half being £1200.00) Can this be right????

Commission is not a fee so it wouldnt be right. Commission is paid from the annual management charges and may take upto 15 years to be recovered. It is not charged up front (otherwise it ceases to be commission and becomes a charge).

Any charges that are incurred by the new contract are not liable by the other party. If they dont like the charges then they can choose a different contract. The choice of contract is not the problem of your partner.

zazab

Thanks for that. The letter she has given him a copy of from her pension company says they confirm the commission rate on these cases will pay 5% on any transfer value processed to the policies. (Then she has tippexed the next bit out). So from what you are saying she isn't losing out, is that correct?

zazab

As she is threatening to take my partner to court over this do you think he has enough information to call her bluff?? He can't afford to pay for solicitors again or to pay her what she is asking for. Anyone any ideas please beofre he has a nervous breakdown

Debt_Free_Chick

Let me understand this.

She was offered a share of his pension. She had to take this as a transfer value and pay it into her own plan.

In doing this, the new plan provider will pay commission to the person who arranged the transfer.

If all this is correct, then she doesn't have to fork out any money. The commission is paid by the pension provider to the person who arranged the transfer. She is not losing out as the commission is included in the charges on the plan. If she went direct and arranged the transfer (which would be near impossible to do), the charges would be the same, even though no commission is paid out.

Call her bluff

dunstonh

Commission is not a fee. Her pension isnt going to have 5% deducted from it. Commission is what the adviser for the policy is paid by the provider/insurer. It is not paid directly by the policyholder (although the annual management charges fund it over the long term).

As she is threatening to take my partner to court over this do you think he has enough information to call her bluff??

Its only a threat. Her solicitor would point out that its not a fee and not let it get to court for that reason. The adviser for the policy should also point out its not a fee and I would suggest that she is told to clarify the remuneration with the adviser.

I have done a number of pension sharing orders and similar and not once has something like this been asked. She is trying it on to get 5% when she isnt paying 5% herself. Call her bluff.