The problem is, pensions can be enormously complicated.
The importance of getting good legal advice
You need to get expert legal advice tailored to your exact circumstances, including the details of pension schemes for you and your ex-spouse. A divorce lawyer will be able to assess all the relevant information and advise you on the best way to arrange your finances following the divorce.
Their aim will be to protect your pension and make sure you’ll have enough to live on in retirement. And to prevent you from missing out from pension benefits you’re entitled to.
It’d be easy to make a poor decision because you don’t understand the complexities of pension arrangements, or agree to something that could leave you worse off in your later years. Remember that the decisions you make now could have a major impact on the rest of your life, so you need to get as much reliable advice as you can.
Public sector pensions – what you need to know
The first thing you’ll need to do is get a valuation of your pension benefits. This is known as a Cash Equivalent Transfer Value (CETV) estimate of your pension benefits. This will be needed by the court when applying for a court order.
For greater accuracy, it could be a good idea to request an actuary’s report. Although this can be costly, it should show the true value of a pension. This goes beyond what’s in the pension pot, and includes the kinds of benefits which civil service pensions in particular are known for.
With a proper assessment of your pension value, the next step is to how to deal with pensions in your divorce. You have a few different options, include pensions offsetting, pension sharing orders and attachment orders (known as pension earmarking in Scotland).
There’s a lot of detail to absorb with each of these options, but here’s a very brief look at what these terms mean:
• Pensions offsetting – this is where the pension value is offset against other assets, an option that offers a clean break for all parties. For example, your ex will get a larger share of the family home but you’ll get to keep the whole of your pension.
• Pension sharing orders – where a percentage share of one person’s pension is transferred to the other person. However, things like death benefits can’t usually be shared.
• Attachment orders – where one person agrees to pay a portion of their pension income to their former spouse on retirement.
To understand and discuss your options for pensions during divorce, get in touch with Wirral divorce solicitor Tracey Miller Family Law today to book a free consultation.