Any pension has to be taken into account in deciding a settlement and may be a significant marital asset. We always recommend that specialist advice is sought when there are pension assets. Pensions can be complex to value and different considerations may apply to each pension.
There are three main ways of dealing with pensions:-
- Offsetting – The pension is valued and it is agreed that the person without significant provision will receive a capital payment from another source. There has to be sufficient other capital for this option to be available.
- Pension Attachment Orders – This provides that a proportion of a pension, once received (annual income and a lump sum) should be then paid to the other party. This type of pension provision is no longer common as one spouse still remains dependent on the pension scheme member.
- Pension Sharing Orders – This Order allows the pension fund to be divided between two spouses. Different percentages may apply depending on the existing pensions of the parties, their ages and the other division of the assets. Specialist pension advice may be needed to calculate the most suitable share and it is important that independent legal advice is obtained at an early stage.
Special rules also apply to armed forces, police, fire service, local government and NHS pensions and expert advice should be taken.
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