Pension sharing orders
Produced in partnership with Rebecca Dziobon of Penningtons Manches Cooper LLP
Pension sharing orders

The following Family guidance note Produced in partnership with Rebecca Dziobon of Penningtons Manches Cooper LLP provides comprehensive and up to date legal information covering:

  • Pension sharing orders
  • Key features of pension sharing
  • Types of pension that can or cannot be the subject of pension sharing orders
  • DWP guidance
  • Pension sharing freedoms—implications
  • Tax
  • Variation, set aside and appeals out of time
  • Foreign pensions
  • Legal Aid Agency’s statutory charge

Pension sharing is the method by which an existing (shareable) pension arrangement is split and divided between the parties following divorce, nullity or dissolution proceedings. It is not a financial provision or property adjustment order but a separate species of order.

Pension sharing introduces the concept of pension credits and pension debits. The person with pension rights loses a percentage of their fund’s value, which is transferred (the pension debit) upon sharing. The ex-spouse/civil partner receives the percentage transferred (the pension credit) and they gain pension entitlement in their own right.

The credit can be invested in the same scheme (an internal transfer) or a new scheme (an external transfer). Appropriate advice should be sought as to whether both options are available and, if so, which option meets the future financial needs of the parties. For more information, see Practice Note: Valuing pension rights in family proceedings.

The power to make pension sharing orders was introduced by the Welfare Reform and Pensions Act 1999 (WRPA 1999). Pension sharing was extended to the dissolution of civil partnerships for same-sex couples following the introduction of the Civil Partnership Act 2004 (CPA 2004), which came into force on 5 December 2005.

Key features of pension sharing

The key features of pension sharing are:

  1. proceedings must have been commenced after 1 December 2000 for a pension sharing