Business owners and professionals in the South-East frequently hold their pension wealth in small self-administered schemes, structures they control, which often hold commercial property, sometimes the very premises the family company trades from. When such a marriage separates, the pension is no longer a passive fund but an actively managed structure entangled with the business, and it needs particular handling.
Valuation is not a statement balance
A unit-linked fund has a daily price; a self-administered scheme holding a warehouse in Kilkenny does not. Its value depends on a property valuation, on any borrowing within the scheme, and on liabilities such as tenant arrangements with the sponsoring company. The same valuation disciplines that apply to land generally apply here, including scrutiny of rent actually paid by the connected company, since an undervalued rent suppresses both the company's costs and the scheme's apparent performance.
Liquidity and the adjustment order
A pension adjustment order designating a percentage of an illiquid scheme gives the beneficiary spouse a share of a property she or he cannot sell, alongside a former spouse who controls the trusteeship. Settlements should confront this directly: transfer of the designated benefit out to an independent arrangement where the scheme's liquidity permits, or a structure and timetable for funding the transfer, or provision made instead through other assets with the scheme left whole. Leaving the point vague guarantees a second dispute.
Trusteeship, borrowing within the scheme and any restructuring all carry regulatory and tax consequences on which specialist pension and tax advice should be obtained alongside the family law advice.
This article is general information, not legal advice. For the full practice area, see Pensions on Divorce, or contact the practice to discuss a matter in confidence.