Divorce & Pensions
At Lovell Chohan solicitors, we have Advance Law Society and specialist Resolution solicitors who can assist you with Divorce & Pension matters. When dealing with ancillary relief applications in divorce proceedings and in order to achieve a fair division of the parties’ assets on divorce, the court will also consider the effect on one spouse of the loss of an entitlement in the other’s pension. The court can make pension sharing orders under section 24B of the Matrimonial Causes Act 1973. The benefits which have accrued to one party under a pension scheme can be a valuable asset and yet they are not realizable until the pension scheme member reaches retirement. A pension sharing order enables the court to divide the pension rights between the parties at the time of divorce. This is done by directing a transfer payment equal in value of a proportion of the member spouse’s pension rights to be made to a pension arrangement which could then provide retirement benefits for the other spouse. In this way, both parties would have immediate control over their own pension provisions. Pension sharing orders can be made on divorce or nullity but not on judicial separation.
A pension sharing order can be made against an occupational pension scheme or personal pension scheme. Pension sharing also applies to most public service pensions and the Sate Earnings Related Pension Schemes (SERPS). A pension sharing order will be expressed in percentage terms, and depending on the type of pension scheme involved, the transferee may have the choice as to whether to become a member of the transferor’s pension scheme, but in his or her own right. This is known as an internal transfer,or alternatively to transfer to a different pension scheme as an external transfer. In either of these options the pension provider is entitled make a charge for implementing the pension sharing order.
The court has wide powers and discretion to make orders relating to payment of the member’s pension on retirement, the lump sum payable on retirement or on death after retirement or the lump sum payable on death in service, after leaving service but before retirement and after retirement. The court may also require a party to nominate the other to receive their death in service benefits.