Pensions & Divorce

The Court tries to prioritise each party’s financial needs when it comes to deciding how to divide the equity in the family home, how much maintenance needs to be paid or how to distribute other savings and pensions.

For example, if one spouse has a substantial pension and the other spouse who worked in the home has no pension/small pension, the Court can order that part of the larger pension can be paid to the other spouse.

Under the various Family Law Acts a court has the power to treat a pension as an asset of a separating couple, and can order that the pension fund be divided into whatever shares it deems appropriate. The process of dividing the pension is known as a Pension Adjustment Order (“PAO”).

Another important point to note is that whatever percentage of the pension is allocated, for example 50%, it will be 50% of the pension fund to date, not 50% of total funds to retirement age.

A PAO must be made within 12 months of the granting of the separation.

How much of my pension will be taken into account?

Each of your pensions and their value will be taken into account. This includes your pension before you were married or in a civil partnership with each other. Pensions in other jurisdictions are also accounted for. If you lived in the UK for example, you may have had a pension there and this will need to be accounted for.

Splitting your pension after you’ve retired

If you and/or your ex-partner have retired and are in receipt of pension payments, the pensions can still be split. It isn’t possible to take a lump sum from your ex-partner’s pension if they have already taken their lump sum.

Do you need a court order?

Only a court can make a pension adjustment order. Trustees of pension schemes will only follow the rules set out in a PAO.