The issue of pensions has become increasingly more important to parties who are divorcing or going through a civil partnership dissolution. The ways in which pensions are dealt with by the courts in divorce/dissolution proceedings are as follows:-

Pension Offsetting

This is the method whereby one spouse/partner will receive more available capital in return for not having any order in relation to the other spouse's/partner's pension.

Pension Attachment

This is where one spouse/partner claims a percentage of the other spouse's/partner's pension to which they are entitled upon retirement.

A claim can be made against:

  • the death benefit element;
  • the income received;
  • the lump sum element.

Problems do arise with attachment orders in so far as the spouse/partner making the claim has no control over the fund or the retirement age of the paying spouse. Further problems can arise if the claiming spouse remarries or the pensioned spouse partner dies either before payments commence or after.

Pension Sharing

On 1st December 2000 the Welfare Reform and Pensions Act 1999 brought about pension sharing. This method allows for a percentage of one spouse's /partner's pension fund to be transferred into the other spouse's/partner's pension fund now. This means that the receiving spouse/partner now has a pension in their own right. The benefit of this method over attachment is that the receiving spouse has control over the fund and there are no problems relating to remarriage of the receiving spouse/partner or death of the pensioned spouse/partner as the fund will be in the control of the receiving spouse/partner.

Prior to being able to advise as to the best way to deal with pensions in divorce/dissolution proceedings we require detailed information relating to the pension policy in question and other assets in the case. It is also often appropriate to take advice from a independent financial adviser as to the repercussions of a possible pension sharing order. This will allow for any negotiations to be made upon a informed basis. Once specialist advice has been sought we will then be in a position to act upon the information provided by the financial adviser.

Given that the law relating to pensions is very complex, we suggest that detailed advice be obtained from a family lawyer before any financial agreement is reached. Contact us today to arrange an appointment.

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