Pension

Pay divorced wife from pension annuities, UK court orders NRI

In an order that may impact divorce battles between NRI couples in the UK, an appeal court there has decided that a pension-sharing provision does not apply to foreign pensions, but directed a man to pay a monthly maintenance to his former wife from its annuities. The order may make it tough for warring couples in the UK to transfer or conceal assets offshore, a lawyer said.

The squabbling couple is a banker and his former wife.He once earned over £350,000 a year but blew up his fortune on spread-betting and gathered debts of £500,000, courts were told. In October 2015, a UK family court ordered him to hand over two-thirds of his pension income to his former wife after observing that he had transferred three UK pension funds to an Indian pension provider.

As per UK law, a pension may be divided between divorcing spouses by means of a sharing order. But the dispute landed in an appeal court where the husband argued that provisions under the Matrimonial Causes Act of 1973 did not apply to foreign pensions. The court agreed but ordered him to pay the woman two-thirds of the quarterly income derived from the annuity policy as it arises.

The woman had sought a pension-sharing order or transfer of the policy amounts to her and the husband wanted the “periodical payment order” of February 2016 to be varied, as he said he had no real job and earnings.

Sarosh Zaiwalla, the woman’s counsel, later said, “This judgment will come as a welcome relief for parties who find that, in anticipation of matrimonial proceedings, their spouse’s pension has been transferred overseas.”

The family court judge had found that the Indian pension fund belonged to the husband and dismissed his case that he had transferred all his interest in it to one ‘Mr Deshmukh’.The issue was ownership of annuity . The appeal court allowed the husband to produce nominee documents and heard him. The nominee was Deshmukh. The appeal court said, “Who the husband chooses to give the death benefit of the policy to tells me nothing about its current ownership.”

The family court felt the woman should have the entire benefit of the annuity policy, reasoning that because the husband had lost vast sums by gambling, the wife should recover the few scraps left.

The appeal court, however, let some income remain with the husband.

In October 2015, the husband said he would get within four months work in a bank, earning £60,000 per annum.The woman, who was living on “state benefits”, expected to also by then “obtain employment, earning £19,000 annually”.

The family court had ordered the husband to pay a monthly maintenance of £500 from March 2016. But a year later, neither was employed The husband was “exploring qualifying as a teacher. He is also exploring writing a PhD”.

At present, it said, he was earning “relatively modest sums tutoring 11-to 15year-olds in Maths and Physics”, adding, “Had it not been for his reckless conduct in gambling away his high earnings, there would have been no doubt a substantial sum of accumulated wealth for her to have shared at the end of the marriage. But £500 per month is a long way beyond the husband’s capacity at present. I therefore vary the maintenance award to £100 per month from February 1, 2017.”

The Times of India

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