The long campaign for pension splitting seems to be about to come to fruition.

After fighting a rearguard action for some years, the last government had to promise to introduce pension splitting on divorce as part of the price for the co-operation of the opposition in securing the safe passage through Parliament of what became the Family Law Act 1996.

The opposition then became the government and discovered that pension splitting was just as complicated as its predecessor had said it was, with the result that it is only now, after further consultation and consideration, that pension sharing -- as it is now called -- is about to become law.The provisions regarding pension sharing are in Parts III and 1V of the Welfare Reform and Pensions Bill; this is a controversial measure as far as the proposals to 'reform' the welfare state are concerned, but Parts III and IV have attracted little attention and seem likely to survive unscathed when the Bill receives royal assent in October.

It is thought that the provisions will come into force in 2001.Simply put, a pension sharing order is a form of relief which is bolted on to the armoury of orders for ancillary relief which the court may make on or after a decree of divorce or nullity; it does not apply after judicial separation, unlike earmarking.

The court may make 'one or more' pension sharing orders, but it seems that the intention of that provision is to allow orders directed at more than one pension scheme.The Bill was originally drafted on the assumption that Part II of the Family Law Act 1996 would come into force at the end of 2000 and that pension sharing would occur in the context of the period of reflection and so on.

With the possible temporary demise of Part II, there has had to be some hasty redrafting, but the Bill, possibly optimistically, provides also for what will happen when Part II does come into force.

At that time, pension sharing orders may be made 'at the appropriate time', and may also be made by a 'qualifying agreement'; this is an agreemen t made under the provisions of the 1996 Act with the aid of a third party (possibly a mediator), and would not be just any old agreement.

However, the onset of Part II is probably far enough away for most of us not to have to concern ourselves with the detail yet; for the time being, pension sharing will only be possible if there is a court order.

The Matrimonial Causes Act 1973 is amended to provide for all these orders.A pension sharing order is one which provides that the transferor's 'shareable rights' under a specified pension arrangement be subject to pension sharing for the benefit of the other party and specifies the percentage value to be transferred.

The effect of pension sharing is that the transferor's rights become subject to a debit of the appropriate amount, and the transferee becomes entitled to a credit of that amount against the trustee or manager of the pension arrangement (defined as 'the person responsible for the arrangement').

The appropriate amount is the specified percentage of the cash equivalent of the relevant benefits on the valuation day.

The cash equivalent transfer value is to remain the basic method of valuation, and regulations will provide for the process of valuation and some independent supervision of those carrying out the valuations.In effect therefore, a proportion of the transferor's pension fund will be sliced off and handed to the transferee, who will thereby acquire her own pension fund which, normally, she may deal with as she wishes.

The period in which the person responsible must implement the order is four months.Schedule 5 of the Bill sets out the way in which the person responsible may discharge his obligations.

This may depend on the type of pension arrangement, but can include offering membership of that scheme or transferring to another scheme.Pension sharing may also occur in respect of state schemes pensions, but this is limited to the State Earnings Related Pension Scheme (SERPS) and does not include the basic retirement pension.

Here, the effect is that the transferor loses part of his weekly pension which is transferred to the transferee.

There is no right to remove to another pension arrangement.It is intended that there will be some provision for the transferor to rebuild the value of his pension by making additional contributions; this will be a limited concession and the detail will be contained in regulations.There are certain restrictions on the right to make pension sharing orders, the most notable of which is that no such order may be made in respect of a pension arrangement which is already subject to an earmarking order.

This would certainly apply if a previous spouse had obtained such an order.

The wording of the provisions is ambiguous, but it may also mean that an applicant could not seek both a share of her spouse's shareable rights and an earmarking order over the same arrangement; this might seem superfluous, but it might occur where a clean break wife wanted both a pension share for the future and an earmarking of death in service benefits to protect the Child Support Agency payments if the ex-spouse died.

If this were the correct interpretation, a choice would have to be made as to which remedy was most appropriate.The right to apply for a pension sharing order will be limited to those where a petition has been issued after the coming into force of the Act; until the coming into force of the Family Law Act, this would be the case even where the parties agreed that there should be a pension sharing order.

This raises the question of whether potent ial applicants should wait to file their petitions until they may take advantage of the new provisions; this must be entirely a matter for them and would depend on how important to them a pension sharing order would be.

Obviously, pension sharing will not be appropriate in all cases; there will be no presumption that it should occur and the existing remedies as to earmarking will survive.Finally, may a person with pension rights who is a potential transferor forestall his spouse's right to pension sharing by issuing his own petition before the appointed day? This was a possible issue when earmarking was about to be introduced and is likely to rear its head again.

It would seem that the issue of a petition would prevent a pension sharing order, but there is nothing in the Family Proceedings Rules 1991 to prevent the other party from issuing her own petition after the coming into force of the Act -- provided a decree had not been granted by then.

On normal principles, the two suits would have to be consolidated; but would the second petition be treated merely as a cross-petition? There are some unanswered question here which those drafting rules would be well advised to anticipate.