Pensions on divorce: a guide
The Report from the Pension Advisory Group
Whilst property can often prove to be the largest asset to be divided when it comes to a divorce settlement, pensions can often run a close second and are by their general nature extremely complex. As an asset, whilst their existence may be known, rarely is their value or the rights that attach to them.
The various types of pensions available, be it money purchase; final salary; public sector or employer contributions; SIPP or SASS make this area of law a minefield which, therefore, requires a high degree of expert knowledge and understanding. It is, therefore, extremely important that specialist advice is obtained from financial planners or other specialist pension advisers at an early stage with consideration also to be given to the obtaining of a pension (actuarial) report.
After 2 years hard work the Pension Advisory Group has now published its guidance as to how pensions on divorce are to be best treated by lawyers and the Court alike. The previous lack of guidance having resulted in a somewhat haphazard and inconsistent approach having been undertaken by both which has been less than ideal.
Guidance was obtained from family judges; lawyers and pension experts. The Group has together produced a clear good guidance guide which hopefully will provide a better understanding as to how a pension is to be treated on divorce. The Practice Guidance aims to demystify the jargon used and improve understanding in this complex area of law thereby enabling a more consistent approach and hopefully produce fairer outcomes.
At Trethowans, the Family Team has for a long time acknowledged the benefits of engaging the services of financial planners at an early stage in order to obtain guidance on the value and treatment of the pension wealth available to the parties and its subsequent distribution.
The guidance from the Pension Advisory Group will not stop the need for this although, hopefully, it will allow for those going through a divorce to have a clearer understanding as to how these valuable assets are to be treated be it by way of sharing or offsetting and still occasionally attachment.
Guide to the treatment of Pensions on Divorce