Divorce: Unique Content Article on pension valuation,pension sharing

Unique Content Article on pension valuation,pension sharing

The Court and Pension Sharing Orders

by Peter Slegg

 Q: Will the court automatically make a Pension Sharing Order (PSO)?

A: No. <a href="http://www.divorceandpension.com/pensionsharing.html">Pension sharing</a> is just one of three options that are available to the court. Nevertheless pension sharing is the most likely method for the court to order some distribution of your pension.

The other approaches are known as 'pension offsetting ' and 'pension earmarking'. 

 

Q: What are the differences between an Earmarking Order and a PSO?

A: There are a few differences. In particular, an Earmarking Order:

 

 





- does not adopt a clean break approach as the earmarked pension is only paid to your previous spouse or civil partner when you retire; and
- stops on your death (so if you die before your former spouse or civil partner, they may not be left with anything).

In addition, while an Earmarking Order against a pension ceases if your former husband or wife remarries or your previous civil partner enters into another registered civil partnership, Earmarking Orders against lump sums (such as the tax free cash lump sum on retirement and the lump sum on death after retirement within 5 years after retirement date) do not.

Q: What type of information does the Trustee need?

A: The solicitors and the parties concerned will talk about the financial information and attempt to agree on how the assets are to be shared.

It is feasible that they may want to settle on a draft PSO as part of the process. If your solicitor has any questions regarding the draft PSO, please ask them to contact the pension trustee. The trustee may help them by reviewing the wording of the draft PSO in order that it is in a form that the team could implement once the final PSO is issued by the court. If a draft PSO is sent to the team, a draft Consent Order must accompany it.

The trustees cannot and won't guarantee to pick up every issue and the responsibility for the wording of the PSO remains with your solicitor. Nonetheless the team may just be able to help by providing a technical check early on in the process. For instance, the team could check whether the draft PSO is properly structured. A wrongly drafted PSO can lead to issues later in attempting to implement it which, in turn, might end in delays and most likely extra legal charges in remaking the PSO.

If the court issues a PSO, particular information will be requested from you and your previous spouse/civil partner before it can be implemented . The PSO will also set out the basis on which any administration charge is paid. 

Information courtesy of Adviser Hub. If you want to know more about the topic of '<a href="http://www.divorceandpension.com">divorce and pension</a>' or need help with your <a href="http://www.divorceandpension.com/divorceandpension.html">pension valuation</a> it's sensible to find advice from a qualified pensions adviser.

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