For long marriages, the pension can be the largest asset after the family home, or in some cases, the largest asset in the marriage. Therefore it is essential that pensions are valued so that they can be taken into account in the division of the matrimonial assets.

There are many types of pensions that can be divided on divorce and the most complex are defined benefit schemes. These include final salary and public service schemes such as police, NHS, fire and rescue, teachers and civil servants.

The court can make three types of orders in respect of pensions:

  1. Offsetting. This means balancing the value of the pension against other matrimonial assets which include the family home.
  2. Pension sharing. This allows for a percentage share of the member?s pension to be transferred into a pension scheme in the name of the other spouse.
  3. Attachment. This means that a percentage of the member?s pension is set aside for the other spouse to claim on retirement. The disadvantage of attachment is that the spouse receiving the benefit would lose their entitlement if they remarried before the member retired.

In practice pension sharing orders and offsetting of retirement benefits against other matrimonial assets are more popular and useful to the parties than attachment orders, because they achieve a clean break of the members pension rights.

Before any decision is made about offsetting or pension sharing it is essential, especially where the value of the pension is substantial, that a pension report is obtained from an actuary. The actuarial report will detail how the pension can be apportioned to equalise either capital or income on retirement.

Upon divorce or dissolution of a civil partnership a spouse or partner will be entitled to claim a state retirement pension based on the contributions of their spouse or partner provided that they have not remarried or entered into a further civil partnership prior to the state retirement age.

If you are separating and the martial or partnership assets include pensions, contact us today for initial advice.

Thank you very much for all your support and guidance with my recent divorce - you were fantastic!

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