When a couple is dealing with divorce, they have a lot of things to consider both in practical and financial respects. There is often, quite understandably, a focus on practical arrangements such as the children and the family home and of course, they are quite rightly, fundamental and of primary concern. However, it is important that proper consideration is given to pensions and how they are dealt with, as often, they can be very valuable assets, sometimes the most valuable, or at least second only to the family home.
As pension assets are not usually available immediately (depending on age and circumstances) they can be overlooked by couples or not prioritised. It is extremely important if there are pensions that up to date valuations are obtained (normally cash equivalent values), and advice is taken in relation to how they should be factored in to overall settlement arrangements with regard to their finances.
As well as taking legal advice, it is often very important to have advice from an expert actuary (an expert in pensions) as to how they should be divided, as this is a specific and often complex area.
There are different ways of dealing with pensions on divorce, but the most common way is pension sharing, where a percentage of one spouse’s scheme is ‘shared’ and transferred to the other party. This can sometimes be within the same scheme, or to a completely different one depending on what is financially best and what a particular scheme allows. The other main option can be what is called an ‘offset’ where the party entitled to some pension provision from the other spouse has it in the form of another asset, for example a greater share of the home or more of the available savings etc. What is best is different on a case by case basis, and this is why it is so important to obtain both legal and actuarial advice before anything is decided/finalised.
Pension sharing can only be dealt with where parties are married, it is not something available to cohabiting couples, and it is only an order that can be made by a court, but this can of course be dealt with in the context of an agreed financial settlement between spouses that the court is asked to approve and make legally binding, as well as in circumstances where the court has to make an overall decision.
At Wendy Hopkins Family Law Practice we have experienced expert solicitors who can advise on this important and detailed area in order to help clients obtain the best and most appropriate outcome. See our contact details below to speak with one of our family law experts today.
T: 029 2034 2233