Divorce or separation
Getting a divorce or ending a civil partnership can impact your pension and future retirement. So, we’ve put together this page to help you understand your options and the process.
Contents
How does divorce or dissolution affect my pension?
Getting a divorce or dissolving a civil partnership can impact your pension and future retirement. You and your ex-partner will have a few options when deciding how to split your pension benefits. But before agreeing how to separate your finances, the court may ask you and ex-partner to provide details of your pension and estimated values when deciding any settlement.
Deciding how to split your pension
If you get divorced or dissolve a civil partnership, the court will typically issue a Pension Sharing Order, as it can offer a ‘clean’ and fairer divide of assets. However, you and your ex-partner have a few options when deciding how to split any pension benefits.
Important
If you need any guidance on how to split your benefits, you should speak to your solicitor for legal advice.
How to get a pension estimate
Before agreeing how to separate your finances, the court may ask you and your ex-partner to provide details of your pension benefits and their estimated value. Here’s how the process works:
- Download a Pension estimate request form from the Forms and Documents page on the LPPA website.
- Fill in the form and return it to LPPA via the online contact form.
- You usually receive an estimate of your pension benefits within three months of your request.
- Once you receive your estimate, you should pass it on to your solicitor so that the court can make the necessary judgement.
- Your divorce settlement may include a Pension Sharing Order (PSO), which gives a percentage of the value of your pension to your ex-partner.
- You need to send us the details of your PSO as soon as possible so we can make any necessary arrangements for you (see below for more information on PSOs).
- If your settlement does not affect your pension, you do not have to do anything.
Pension Sharing Orders (PSO)
If the court rules that you have to share your pension with your ex-partner, it will issue a Pension Sharing Order. This document sets out what will happen to your pension, including the amount that should be reduced from your pension benefits and given to your ex-partner (usually as a percentage).
Please note
If the court issues a Pension Sharing Order, which requires us to take certain actions (like splitting your pension), you may have to cover any costs involved for LPPA. These costs are explained on the pension estimate request form.
How Pension Sharing Orders work
If you are awarded a PSO, we may need to make some adjustments to your pension. Here’s how it works:
- Send us a copy of your Pension Sharing Order and your final divorce or dissolution paperwork (decree absolute).
- The quickest way to do this is to take a picture and send it to us via our online member contact form.
- On receipt of your documents, we write back to you and let you know how much it will cost to process the changes to your pension (and whether we need any further information).
Important
When processing a Pension Sharing Order, LPPA charges a fee. The PSO will specify if you cover the full cost or if the cost must be shared with your ex-partner. We can’t process the PSO until we receive full payment, so it’s important to pay your share as soon as possible.
- We then send you an invoice for these costs a few days later.
- Once we have received the payment and all the information we need, we are ready to process your Pension Sharing Order.
Note – A PSO must be implemented within 4 months of the order taking effect, or the day we receive all the information we need to implement the PSO, whichever is later.
- We write to your ex-partner with details of their pension benefits and any other options available to them (eg transferring their benefits to another pension scheme if applicable).
- Once the Pension Sharing Order is processed, we write to you to let you know how it impacts your pension benefits.
What happens to my pension benefits after a Pension Sharing Order?
Once we have applied the PSO to your pension, the agreed percentage of your benefits is reduced from your account (known as pension debit) and transferred to your ex-partner (known as pension credit). Your ex-partner will have their own pension credit account and will not have access to yours. We will contact them separately on this. Due to data protection, we can’t discuss their pension credit details with you.
If you have been awarded a pension credit, learn more information here.
What happens to my death benefits after a Pension Sharing Order
If you are divorced or your civil partnership is dissolved, your ex-partner is no longer entitled to a spouse’s or civil partner’s pension if you die before them.
Your divorce or dissolution does not affect your children’s pension benefits in the event of your death, even if the PSO awarded your ex-partner 100% of your pension.
Your death grant will still be paid to your nominated beneficiary in the event of your death. If your ex-partner is your nominated beneficiary, this will remain in place unless you change it. The easiest way to do this is via your online PensionPoint account.
What if I re-marry or enter a new civil partnership?
If your pension is adjusted after a Pension Sharing Order and you re-marry, enter a new civil partnership or cohabiting partnership, the pension benefits for your new partner would be based on the pension you have left after any reductions for pension sharing.
If you re-marry or enter a new civil partnership and then divorce or dissolve your civil partnership again, your remaining pension rights could be divided. However, the court cannot issue a Pension Sharing Order if an Earmarking Order (see more below) has already been issued against your LGPS pension rights. Similarly, the court cannot issue an Earmarking Order if you’ve already been issued a Pension Sharing Order.
For more information, visit the LGPS website or see the LGPS scheme guide.
If your pension is adjusted after a Pension Sharing Order and you re-marry, enter a new civil partnership or cohabiting partnership, your new partner may be eligible to receive a pension if you die. The amount would be based on the pension you have left after any reductions for pension sharing.
For more information, visit the LGA website or see the FPS 2015 scheme guide.
If your pension is adjusted after a Pension Sharing Order and you re-marry, enter a new civil partnership or cohabiting partnership, your new partner may be eligible to receive a pension if you die. The amount would be based on the pension you have left after any reductions for pension sharing.
If you re-marry or enter a new civil partnership and then divorce or dissolve your civil partnership again, your remaining pension rights could be divided via another Pension Sharing Order.
For more information, see the PPS 2015 scheme guide.
Earmarking Order
If you and your ex-partner agree to pension earmarking, the court will award an Earmarking Order. This document sets out what portion of your benefits your ex-partner will receive including one or a combination of:
- All or part of your pension
- All or part of your lump sum
- All or part of your death grant
Regardless of whether you are still paying into your pension scheme, your earmarked benefits will be paid to your ex-partner when you take your pension and receive your lump sum (or in the event of your death). If you are already retired, a portion of your pension may immediately be paid to your ex-partner.
When you start taking your pension (or in the event of your death), LPPA will contact you (or your beneficiaries) to confirm if the Earmarking Order is still valid (and request further information if needed).
If your ex-partner re-marries or enters a new civil partnership, the Earmarking Order will no longer apply and you will get your full pension back. This means their annual pension payments will stop but their lump sum will not be affected, unless the order states otherwise.
In the event of your death, any pension payments to your ex-partner will stop but any earmarked death grant may be paid to your ex-partner.
