If you divorce or your civil partnership is dissolved, this may affect your LGPS pension benefits. As part of the legal process, the value of your pension will need to be disclosed, and the Court may take this into account when deciding any financial settlement.
The Court may issue a Pension Sharing Order or an Earmarking Order to determine how pension benefits should be treated.
How can the Court deal with my pension?
| Question | Pension Sharing Order | Earmarking Order |
|---|---|---|
| How does it work? | Your pension benefits are divided between both parties. | Part of your benefits is paid to your former spouse or former civil partner when the pension becomes payable. |
| Who owns the benefits? | The former spouse or former civil partner receives a separate pension entitlement. | The benefits remain part of your pension. |
| Can it come to an end? | No. | It may end in certain circumstances such as remarriage or death. |
What is the Process?
If your pension is being considered as part of a divorce or civil partnership dissolution, the process will usually involve the following steps:
What is a Cash Equivalent Transfer Value (CETV)?
A CETV is an estimate of the value of your LGPS pension rights for the purposes of divorce or civil partnership dissolution.
Typically, the Fund will provide a CETV within 3 months of your request. A fee may be charged if you have already received a free CETV within the last 12 months.
What if I am already receiving my pension?
If you are already receiving an LGPS pension, only a share of the annual pension can be divided.
Your former spouse or former civil partner will not have the option to take a tax-free lump sum.
What should I do after a divorce or dissolution?
- Review your death grant nomination.
- Confirm that your personal details are up to date.
- Understand that your former spouse or former civil partner will not usually remain eligible for a survivor's pension.
- Understand that any eligible children's pension will not be affected.
- Consider any implications if you remarry or enter into a new civil partnership.
If a Pension Sharing Order has been implemented against your LGPS benefits, any future survivor's pension payable to a spouse, civil partner or eligible cohabiting partner may be reduced.
What is a pension credit?
If a pension credit is awarded, this will be a separate pension benefit from your own pension for your former spouse or former civil partner.
Your former spouse or former civil partner may:
- Take their pension from age 55 (subject to the relevant rules and any applicable reductions).
- Wait until their Normal Pension Age.
- Transfer the pension credit to another pension arrangement.
- Apply for early payment on the grounds of serious ill health if eligible.