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Warning of admin chaos over pension split plans

IFAs could have just four months to arrange splitting a client&#39s pension after divorce under the Government&#39s pension-sharing proposals.

A draft document for the new regime, due to be revealed this summer, will allow divorced couples to make a clean break from a relationship from April 2000. It will replace the current earmarking rules.

The proposals are expected to give schemes four months to implement and send a transfer value to a member and their spouse.

But life offices have raised fears that this could create huge admin problems. They say four months will not be enough time to complete transfers and set up records.

The problem could be made worse if a member, spouse, lawyer or IFA questions the transfer value.

M&G pensions marketing manager John Page says: "On the face of it, it seems a reasonable time but it is not in terms of records and gearing up. If there are a lot of queries about the transfer value, this could gum up the system."

Some life offices fear that scheme members may be hit if the scheme cannot take a transfer from a shared pension. They believe schemes should offer the spouse independent membership of a scheme instead of a transfer.

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