My divorce included a pension sharing order, how do I make sure it is implemented?

A pension sharing order is an order that provides for part of one person’s pension to be transferred to their former spouse or civil partner. It is a way of allowing separating couples to achieve a ‘clean break’ with no ongoing financial obligations to one another, whilst, at the same time, leaving both parties with assets that they will be able to use further down the line, to help them to meet their needs in retirement.

Where a pension sharing order has been made by the court as part of a financial settlement, that is not the end of the matter. The pension sharing order must also be implemented. To do this, the parties need to take the following steps:

Step 1 – Apply for the final order of divorce or dissolution

The pension sharing order cannot be implemented until after the final order of divorce / dissolution has been obtained. Therefore if you have not yet obtained this by the time the pension sharing order is finalised, your first step should be to apply for the final order of divorce / dissolution. The timing of this needs to be considered carefully to ensure that were the worst to happen and you or your ex were to sadly die after the pension sharing order has been made by the Court but before it has become effective, you / your estate does not miss out. This is something you should take specific advice on. Once received, a sealed copy of the final order of divorce / dissolution will need to be sent to the pension provider.

Step 2 – Send documents to pension provider

The final court order will normally direct one of the parties, or the court itself, to send the necessary documents to the pension provider. There is, however, no harm in the provider receiving things twice, so if you have any doubts about whose responsibility it is to send the paperwork to the pension provider you should take steps to do this. The provider will generally require copies of the final court order (including the Pension Sharing Order), and a copy of the final order of divorce / dissolution.

Step 3 – Respond to any requests from the pension provider for further information

Once the pension provider receives the Pension Sharing Order, they will either issue a ‘notice of implementation’ (if they have all the documents / information they need to implement the order), or to request further information. For example, the pension provider may need details about which pension scheme the benefits of the Pension Sharing Order should be transferred to, particularly if they are being transferred out into a different scheme.

Step 4 – Pay the pension sharing fees

Some pension schemes, particularly those in the public sector, can charge to implement a pension sharing order. Some schemes will allow the fees to be paid by deduction from the share to be made, whereas others will not. The final court order should specify who will be responsible for paying these fees (or in what proportion they will be shared). The fees will need to be paid before the pension share is implemented.

Once the pension provider receives all the information they require, they typically have four months to implement the pension sharing order.

While this process may sound complicated, it can be made easier by taking some proactive steps before the pension sharing order is made:

• write to the pension provider at an early stage, to ask them for the information that you will need to implement a pension sharing order, so that everything can be sent to them in one go;
• contact the pension provider with a draft copy of the pension sharing order before it is finalised, to ask them for their comments; and
• consider who will pay the pension sharing fees, if any, and who will send the documentation to the pension provider, and then specify this in the court order setting out the final financial settlement, to avoid any disagreements or confusion further down the line.

Should you require any further advice about whether a pension sharing order is suitable for your case, or how to implement one that has already been made, please contact our specialist family team.