In the event of divorce, dissolution of civil partnership, annulment or judicial separation, a court may order a pension scheme to pay all or part of a member’s entitlement to pension to his/her former spouse or civil partner. This could be in accordance with an attachment order, sometimes referred to as an earmarking order, or under the terms of a ‘pension sharing’ order.
If requested, the authority’s pension’s administrator can provide pensions information for the court proceedings.
An earmarking order could apply to all or part of your retirement pension, potential lump sum, or possibly your lump sum death benefit. If you have already retired, the order may require immediate payment of pension to your former spouse or civil partner. If you are an active or deferred member, the order would not have effect until the benefits become payable.
Alternatively, a pension sharing order would have immediate effect. The court would instruct that a percentage of the value of your benefits should be deducted and transferred to a pension credit account which your authority would set up for your former spouse or civil partner (who becomes a pension credit member of FPS 2015).
Pension Credit Member
A pension credit member is entitled to draw their pension at the scheme’s deferred pension age. If the pension credit member had already reached deferred pension age at the date that the pension sharing order comes into effect, their pension entitlement would be put into payment immediately. They have a right to commute part of the pension for a lump sum on similar terms that apply to you, provided that you had not already retired and commuted part of your pension before the pension sharing order takes effect.
If the pension credit member dies before any benefits derived from the pension credit have been paid to them, a lump sum death benefit would be payable. This will be equal to 2.25x the annual rate of the pension credit pension.
If they die within 5 years of the pension credit pension coming into payment, and they are under age 75, a death grant would be payable equal to the difference between 5x their pension and the instalments already paid. There are no survivor pensions attached to a pension credit.
On divorce or dissolution of civil partnership, your former spouse or partner ceases to have any death benefit cover in respect of the portion of the pension you retain after the pension sharing order has been acted upon.
If you had entered into a new relationship at the time of your death, and they qualify as an eligible surviving partner, they would be entitled to a surviving partner’s pension based on the portion of pension you have retained after the pension sharing reduction.
However, an eligible child’s pension would be calculated on the pension to which you would have been entitled had no reduction been made at all for pension sharing.