Section 21 - Pensions and divorce or dissolution of a civil partnership

Pension rights could be one of the most valuable assets, so in the event of a divorce or the dissolution of a civil partnership, ex-spouses or ex-civil partners may be entitled to part of a member’s pension. Therefore, it is advisable for members to seek legal advice on the options available.

Both partners should get their pensions valued before making any decisions or arrangements. Pensions include any occupational, any personal pensions and also the State Pension.

A Cash Equivalent Transfer Value (CETV) calculation will need to be done and Southwark Pension Services are able to do these. This will provide specific information about the pension, and the Court will take this value into account in any financial settlement. Requests for CETVs must be made in writing to Southwark Pension Services. The member should make it clear that a CETV is required for divorce purposes and also specify the full address to which the details to be sent.

Southwark Pension Services will need to request information from your payroll department in order to process the CETV calculation, so members should allow at least six weeks for a full reply. If a CETV has already been provided to them within the last 12 months, there will be a charge for providing a new calculation.

If an Expression of Wish Form has nominated the ex-spouse or ex-civil partner to receive a death grant, this will remain on the pension record until it is changed. Members may wish to consider completing a new Expression of Wish Form.

There are three ways that pensions could be handled as part of a financial agreement when partners split up. Through the Court, a separating couple can choose:

• Pension Offsetting - balance the pension rights against another asset, such as the matrimonial home;
• Pension Earmarking - arrange that when one party’s pension eventually comes into payment, a portion of it will be paid to the other party; or
• Pension Sharing - split the pension at the time of the divorce to give both parties their own pension pot for the future.

Please note that the London Borough of Southwark Pension Fund has no involvement in Pension Offsetting as this doesn’t entail an order against the members’ pension benefits.