Pensions are often assets that are overlooked on divorce when they can actually be the most valuable and significant asset of the marriage. There are various types of pension schemes available and all have unique aspects that make this is a complicated area.
We are one of only a handful of solicitors nationally who have the specialist pension knowledge required to give you the best possible advice. We don’t want to give too much information about this area on our website as this would make that information available to our competitors as well. It is very important this area is dealt with by someone who knows what they are doing as this is fast becoming an area for professional negligence claims. You should be confident that you are instructing someone who knows what they are doing so you do not find yourself in a position where later down the line you realise the result is not what you expected.
The recent changes to pension legislation mean that some types of pensions can now be accessed more readily from aged 55 almost as though they were capital but subject to tax implications. As a result of these changes the case law surrounding how pensions are dealt with on divorce have evolved to look at the distributions of pensions on divorce using the capital value of the pension scheme.
There are also salary related schemes that provide different types of benefits on retirement. These types of pension are a “promise” of future benefits from a certain age and so are as valuable as the amount that a member draws down in benefits following retirement. These sorts of schemes are generally offered by the public sector and certain large private industries.
Because people are living longer, and more people are therefore drawing down benefits and for longer periods – there has been a huge strain on salary related schemes. This can often be reflected in the CETV which may be reduced to try and persuade members to leave their pensions in that scheme. This has also meant that some final salary schemes have closed and members have been moved into a Career Average Related Earnings (CARE) scheme. Whilst the benefits of these schemes are not as good as those within a Final Salary scheme it should be noted that these schemes are still far better value for money than anything that could be bought on the high street.
When dealing with pensions on divorce the starting is to obtain a Cash Equivalent Transfer Value (CETV) of your pension from your pension provider. Many other firms see this as the only basis for discussions. For us however this information is just a starting point. We can provide you with advice relating to your CETV – and how that can be interpreted – to ensure you get the best possible advice in this specialist and complicated area of family law.
There are various ways that pensions can be dealt with on divorce, whether that be pension sharing or off setting an interest in pension by way of a lump sum capital payment. In some cases we can instruct an actuary (a pensions expert) to undertake a report to look at how pensions should be split on divorce to obtain a specific objective.
Our specialist and unique knowledge of pensions means we are best placed to give you the advice you need to ensure this specialist and complicated area of the divorce process is properly dealt with and you – as our client – are confident that you are fully appraised of all the options.