32 | Financial
Sadly, many marriages and civil partnerships end in dissolution and the pensions aspects of the split add to the emotional stress of the unhappy experience.
In this short article Mary Petley of the Forces Pension Society gives you the basic facts about Pension Sharing.
How will the property be split?
There is no one rule that fits all. If the couple can agree between themselves how to split their property, the court will not normally intervene. If they cannot, the courts will decide.
Is it just the pension that stands to be split? No. The ‘matrimonial property’ needs to be split between the parties, and pension rights form only part of it. In Scotland the pension component of matrimonial property is limited to that earned or purchased during the marriage or civil partnership. That limit does not exist in the rest of the UK.
Mary Petley.
Is it just the man’s pension which may be shared? The property of both parties goes in to the matrimonial property pot - the law is gender-blind when it comes to assessing assets. Be aware, splitting an AFPS 75 pension is not as straightforward as splitting other final salary pensions. Use a lawyer who is familiar with AFPS 75 rules!
Is the pension split always 50% of the member’s pension rights? No. It depends entirely on the circumstances and it is possible to share the matrimonial property in such a way that no Pension Sharing Order (PSO) is made. In Scotland the share is expressed in a monetary value, in the rest of the UK it is expressed as a percentage of the member’s pension rights.
Would a 50:50 split result in both parties receiving identical sums? Not necessarily. There are different factors that can influence this – both in favour of one party or the other, depending on your circumstances. That is why it is vital to take informed advice.
Can the PSO be revised later? Not normally – PSOs should provide a clean break settlement.
Who pays the tax on the PSO? The tax liability on the pension share belongs to the Pension Credit Member (PCM) (as the person who is awarded the pension share is called).
When can the PCM draw their pension?
PSOs awarded are payable at age 60 or 65 but can be claimed as early as age 55 at a reduced rate.
Is the person whose pension has been shared tied to the PCM? No. Their rights are not inhibited. They can leave the scheme, transfer out or retire without reference to the PCM.
How do we find out the value of the pension rights? Request a Cash Equivalent Value for divorce purposes from DBS, Glasgow by submitting a ‘Divorce Dissolution Form’ (available on the MOD website). The current charge for this is £180.
If you are a Member of the Forces Pension Society and have questions on a pension issue, please contact us at
pensionenquiries@forpen.co.uk
If you are not a Member but want to learn more about us, visit
forcespensionsociety.org
ENVOY | Winter 2018 |
raf-ff.org.uk
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