The Government have reversed their rules to allow those who faced a reduced lifetime allowance following a divorce, to rebuild their pension rights. The new change in rules would mean that the pension share would count against the beneficiary's lifetime allowance, and could rebuild their lifetime allowance using a special registration form.
Under the current pension system, when a court orders a pension share arrangement, as part of the proceedings, the pension share would count against the lifetime allowance of the contributor. These new rules will apply to pension sharing orders after April 6th 2006. People with pension sharing arrangements issued before this date must apply within 3 years to re-establish their rights.
Our view
Sensible. To learn more about pension simplification and how it affects you visit our Pension Simplification Centre in the Pensions Adviser.com.