Pensions and divorce
A pension may be the last thing on your mind while you are going through or contemplating a divorce. However, your pension fund would form part of the divorce settlement. Unfortunately, the rules around what would happen to your pension fund on divorce, or the dissolving of a civil partnership – are somewhat complex.
Since 1996, it has been a legal requirement for the courts throughout the UK to consider a pension as a matrimonial asset in any divorce proceedings. In many cases, the pension benefits of a divorcing couple will represent one of their major assets, making it essential that the divorce settlement takes account of these in the most appropriate manner.
Civil partnerships became law on 5 December 2005. Registration of a civil partnership allows same-sex partners to gain legal recognition of their relationship and many legal rights of married couples, including those for state and private pension rights. A civil partnership ends on dissolution (or nullity), which is a legal process similar to the divorce of a married couple, formalised by a conditional order followed by final dissolution at least six weeks later. The options for dealing with pension rights on dissolution of a civil partnership are the same as those that apply for divorce.
Which pension plans will be considered by the courts?
The courts can consider pension plans that you and your spouse or civil partner are currently paying into, plans that you have benefits in from the past and plans that are currently paying you an income (i.e. an annuity or pension income drawdown).