The High Court approved an interim pension adjustment order requiring each spouse to bear €20,000 of a €40,000 contribution towards pension trustees’ costs, in a judgment delivered on 24 September 2013.
The order was being finalised after the Supreme Court directed that 40% of the defined benefit pension fund be covered by an interim pension adjustment order. The spouses’ initials are J.D.F., the applicant, and C.F., the respondent. The order concerns retirement benefits claimed by the applicant, excluding a voluntary contribution fund.
The applicant disputed draft terms prepared by the respondent concerning the trustees’ costs and how tax would be handled. The draft provided for payment of €20,000 by each party within five days. It also proposed that, if an amount was not paid on time, trustees could deduct the relevant contribution from a benefit payable to the respondent, while preserving her right to seek a refund of half the amount during the appeal. The draft further assigned any tax arising on a costs contribution to the spouse whose benefit was used to pay it, rather than to the scheme or trustees.
After hearings on 21 June and 25 July 2013, the court approved the draft paragraphs. It said the equal division reflected an agreement between the respondent’s solicitors and the trustees in the context of a claimed €60,000 bill, and was fair given the litigation history and the benefit both parties could potentially receive from the trustees’ involvement. The judge rejected the applicant’s argument that the trustees’ costs should not be borne by either spouse, attributing the expense to his “vigorously litigious (if not punctilious) attitude”.
The court said it had been willing to measure the costs at €40,000 to avoid further expense and possible depletion of the parties’ modest pension funds through a taxation process. It noted that the applicant could pursue a further reduction through negotiation, the Pensions Ombudsman or mediation, but declined to put that possibility into the order because it could create further complications.
The applicant also challenged the tax treatment where the respondent might take an immediate benefit while he intended to remain in the scheme until retirement. The court rejected his argument that he was not receiving a statutory benefit in the meantime. It concluded that the parties’ respective fund values counted as benefits for tax purposes, including where their retirements were not simultaneous. The judgment addressed approval of the interim order and the disputed costs and tax provisions; it does not state a final pension division beyond the 40% interim adjustment.