How To Implement a Pension Sharing Order In a Divorce

A pension sharing order is a legal document that transfers a portion of one party’s pension to their former spouse or civil partner.

It is an important tool that helps separating couples achieve a ‘clean break’ without any lingering financial obligations towards each other.

At the same time, it enables both parties to have assets they can use in retirement to meet their individual needs.

However, obtaining a pension sharing order is just the beginning.

Once you have a consent order approved and the court has made the order, the parties involved must implement it correctly to ensure the intended outcome.

Below are the necessary steps involved in implementing a pension sharing order:

Step 1 – Obtain the final order of divorce or dissolution:

The pension sharing order cannot be implemented until after the final order of divorce or dissolution has been obtained.

If the order has been made, but the final order is still pending, it’s crucial to obtain it promptly.

This is because, in the event of the death of one of the parties after the pension sharing order has been made, but before it has become effective, the estate may miss out.

Therefore, specific advice should be sought on this matter.

Once the final order is received, a sealed copy must be sent to the pension provider.

Step 2 – Send documents to the pension provider:

Normally, the final court order will direct one of the parties, or the court itself, to send the necessary documents to the pension provider.

However, it’s advisable to send them twice, just to be sure.

The provider will typically require copies of the final court order, including the Pension Sharing Order, and a copy of the final order of divorce or dissolution. 

Step 3 – Respond to requests from the pension provider for further information:

Upon receiving the Pension Sharing Order, the pension provider will either issue a ‘notice of implementation’ if they have all the required documents and information, or they will request further information.

For example, they may need details about which pension scheme the benefits of the Pension Sharing Order should be transferred to, particularly if they are being transferred out to a different scheme.

Step 4 – Pay the pension sharing fees:

Some pension schemes, particularly those in the public sector, can charge to implement a pension sharing order.

The final court order should specify who will be responsible for paying these fees or in what proportion they will be shared.

It’s important to note that the fees must be paid before the pension share is implemented.

Once the pension provider has all the necessary information, they typically have four months to implement the pension sharing order.

Tips to make the process more manageable: 

It’s worth noting that the process of sharing pensions can be made more manageable by taking some proactive steps before the pension-sharing order is made.

For instance, writing to the pension provider at an early stage to obtain the information required to implement the order. Or contacting the provider with a draft copy of the order to seek their comments.

Additionally, considering who will pay the pension sharing fees, if any, and who will send the documentation to the pension provider is crucial.

This should be specified in the final court order, setting out the financial settlement, to avoid any disagreements or confusion down the line.

Dealing with your pensions as part of a divorce is not something most people should do themselves.

It’s important to seek professional advice throughout the process to ensure that the pension sharing order is implemented correctly and that both parties receive their entitlements fairly.

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