How does pension sharing work in divorce

If a couple decide to end their marriage, it’s worth considering how does pension sharing work in divorce. Whilst the matrimonial assets will be subject to review, pension arrangements need to be considered also.

Although pension arrangements in divorce will not necessarily be split equally – due to annuity rates, life expectancy differences etc. – in some cases, the courts could choose to begin with an equal division, and then judge the case on its merits.

Equal pension sharing

Retirement benefits therefore need to be considered carefully, and this is why pension sharing could be a an important factor in divorce. If both parties wish to have equal pension income,  the pension fund needs to be carefully reviewed. As women generally live longer than men, they will likely  need a larger proportion on the retirement sharing order.

Pension sharing orders

Matrimonial assets such as property can be transferred between spouses and arranged through solicitors, without the need to go to court. Retirement benefits however DO need a court order, as any retirement provider or scheme cannot divide benefits without a court’s instruction.

In reality, this need not be as severe as it sounds, as both spouses may not contest anything about the pension sharing and all that is required from the court is a consent order.

During divorce procedures, ancillary relief proceedings are separate and may occur after the divorce is final. Pension sharing orders cannot be made until the granting of the decree nisi, and at time there is only a limited time for any amendments.

On granting of the decree absolute, the pension sharing is implemented and no further amendments are allowed.

Pension sharing is not compulsory

Although not compulsory, pension sharing is one of several options that can be considered during ancillary relief proceedings to divide retirement benefits. It may be possible for instance to offset against other matrimonial assets, especially if the benefits are not significant.

It is extremely important to seek independent and expert advice about pension sharing, as courts may ignore any division for the member pension rights. This could be the case if the costs of implementing a pension sharing order are high compared to the pension benefits, or if the couple is only young or married a short time.

Are pension sharing orders affected by future marriage?

The former spouse has no further claim on the member pension rights after division, as they’re now considered to have received retirement benefits in their on right. This is especially relevant in case of future marriage, as the pension sharing order will stand in its own right and not be affected.

Conclusion: pension sharing in divorce needs specialist advice and consideration

Pension sharing advice should be sought at the earliest opportunity during divorce, as the timescale for amendment is limited. It’s wise to seek expert advice, and to aim for agreements between solicitors before going to court, to minimise court time and costs.

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