Pensions and Divorce
How are pensions taken into account?
The value is treated as part of the person's assets.
How can pensions be divided?
By one of three methods: -
These differ as follows : -
In this case the court looks at all matrimonial assets including:-
These are then apportioned between the two parties by offsetting the value of one asset against another as fairly as possible.
If the assets are divided equally then the result could be as follows : -
This is where a part of one spouse’s pension is set aside for the other spouse. A court order instructs the pension trustees/provider that when the members pension becomes payable, an agreed percentage is paid to the ex-spouse. The actual percentage is determined by the judge.
This is the latest and generally considered to be the most suitable method of dividing pension benefits. As the name suggests, the pension benefits/funds are shared between the divorced parties.
However, instead of waiting for retirement for ownership of the benefit, the splitting of benefits is done immediately. The ex- spouse receives the benefit as either : -
A cash value that can be maintained separately with the pension provider, or transferred to a separate pension plan with another provider.
A pension credit from the member's scheme as determined by the court. This credit may then be retained under the existing pension scheme (at the discretion of the scheme administrator) or transferred to another pension vehicle.
What happens to pensions on divorce?
Couples can now demand that pension rights and benefits be taken into account as part of the divorce settlement.
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