Courts have held that a spouse's pension is a relevant investment when it comes to the division of assets. Clare Curran, Family law Partner with Worthingtons Solicitors, explains.
A frequent misconception is that a husband’s pension is protected from inclusion in the calculation of assets upon a marriage breakdown.
The Courts have held that a spouse’s pension is a relevant investment when it comes to the division of assets. There are various ways in which division of the value of a pension may be dealt with.
If the pension is of a substantial value or the main asset, the parties should consider getting a pensions expert to value the pension, as the ‘cash equivalent transfer value’ may not always provide a true picture of the pension value, especially in cases where it is related to employment in the uniformed services.
The first and most common way of dealing with a pension would be to ‘off set’ one party’s interest in the other party’s pension, which allows the pension to remain intact and stays with the spouse who earned it. In return that spouse will forego or accept a reduction in their interest in other matrimonial assets, such as the matrimonial home, up to an agreed or specified value.
The other main option would be to enter in to a ‘pension sharing’ arrangement whereby the value of the pension is shared between both spouses. A transfer payment will be paid to the spouse equal to an agreed or specified percentage of the valuation of the pension, on the date when the pension becomes payable.
A less common option would be to deal with the pension by way of an ‘attachment order’ which specifies that a pension scheme member’s former spouse is entitled to an agreed or specified percentage of the pension from the point of retirement until death. This option is rare given the limited security that such an order would give to the former spouse and the fact that it would result in a financial link being maintained between the parties which is often not desirable.
Clare Curran is a Partner with Worthingtons Solicitors and is head of the Family Law team.Clare is an accredited member of the Children Order panel, and is also trained and qualified to practise collaborative law, a system designed to assist couples in seeking a resolution of their matrimonial issues without resorting to going to court.
Should you have any queries in relation to this article please submit your enquiry in the form below and we will contact you as soon as possible.