Latest insights from our experts
Armed Forces Pension’s on Divorce and Dissolution of Civil Partnership
The Courts have the powers to take account of pension assets in divorce or dissolution settlements. If one party is a member of the Armed Forces often their pension is one of the most valuable assets of the relationship.
Options available to the Court when dealing with pensions include:-
- No order: The Court can decide that no settlement is required e.g. this may be the case where both parties have similar pension provisions in their own right;
- Offsetting: This is the reallocation of other property or assets e.g. the value of your pension rights can be offset against other assets such as the equity in the family home.
- Attachment and Earmarking Orders: The former Spouse or Civil Partner receives payments from your pension either as a lump sum or by periodical payments.
- Pension Sharing: Making a Pension Sharing Order so that a share of the value of the Armed Forces pension is transferred to the former Spouse or Civil Partner who will become a member of the pension scheme in their own right and be known as a Pension Credit Member.
In the majority of cases it would be appropriate to consider no order, offsetting or pension share which allow parties to achieve a clean break between them.
The first thing a member needs to do when considering their pension benefits is to request in writing to the Service Personnel Veterans Agency (SPVA) a valuation of their shareable pension benefits, Cash Equivalent Transfer Value (CETV) in the pension scheme.
If a Pension Sharing Order is made this is normally specified as a percentage of the Armed Forces pension. The SPVA, the scheme administrators, will value the member’s pension benefits and implement the Pension Sharing Order within a four month period which begins on the day on which the SPVA has received the entire pension sharing documentation including payment of any administrative charges, or on the date the Pension Sharing Order takes effect, whichever is the latest. This is known as the implementation period; it is within this period that the scheme administrators will select a date on which the member’s shareable pension benefits will be valued and this is known as the valuation day. Once the valuation has been carried out the member’s pension will be reduced by the value of the shareable pension benefits (the percentage ordered by the Court).
Pensions are a complex area and require specialist legal and sometimes financial/actuarial advice. Caroline Ryan, a Consultant Solicitor of Tozers, specialises in dealing with finances upon divorce and in particular has gained experience in dealing with Armed Forces pensions.