Pensions on divorce—issues for pension trustees
Produced in partnership with David Lockett of Actuaries for Lawyers
Pensions on divorce—issues for pension trustees

The following Pensions practice note produced in partnership with David Lockett of Actuaries for Lawyers provides comprehensive and up to date legal information covering:

  • Pensions on divorce—issues for pension trustees
  • Court orders which trustees may have to implement
  • Issues relating to pension attachment orders
  • Request to review draft order
  • Valuation of benefits
  • Recovery of charges
  • Transfer of benefits
  • Reduction of benefits payable
  • Impact of the pension freedoms
  • Scheme entry into the PPF
  • More...

THIS PRACTICE NOTE APPLIES IN RESPECT OF OCCUPATIONAL PENSION SCHEMES ONLY

Pension attachment and pension sharing orders were extended to cover the dissolution of civil partnerships for same-sex couples following the introduction of the Civil Partnership Act 2004 from 5 December 2005. Cohabitants are not covered by either of these orders as cohabitation does not give the right to enter into either order. In this Practice Note, references to an ex-spouse therefore includes an ex-civil partner.

Court orders which trustees may have to implement

The pension entitlement of a married scheme member may represent the sole or main asset accrued during their marriage. On the breakdown of their marriage, the court may therefore redistribute the benefits derived from pension resources between the parties, where offsetting (whereby the value of the pension resources is set against the value of other assets held between the parties) is not possible or not desirable.

As a result, trustees of occupational pension schemes may be required to implement two types of court orders relating to the redistribution of pension benefits between a scheme member (referred to in legislation as the ‘party with pension rights’) and their ex-spouse (referred to in legislation as ‘the other party’):

  1. pension attachment orders (previously referred to as earmarking orders), and

  2. pension sharing orders

These are orders made against the scheme trustees rather than the member. These orders enable the

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