Amy Walpole Partner at Howes Percival and Family Solicitor, offers guidance on the importance of protecting your pensions entitlements attached to pension sharing orders following divorce.
The divorce process and resolution of financial matters are two distinct issues to be dealt with on separation. Divorce process is far more straightforward and faster than determining the division of finances. In many cases, we find clients have to wait until their financial situation has been finalised before applying for Decree Absolute, which is the final stage in the divorce process and brings the marriage to an end.
The financial arrangements can be resolved in two ways;
In either situation, a Financial Order has been made or approved by the Court. Most people are keen to finalise matters as soon as possible and apply for Decree Absolute. One thing that causes delay is a Pension Sharing Order.
A Pension Sharing Order sets out how much of a pension(s) will be given to you or your ex-spouse. If there is no Pension Sharing Order then Decree Absolute can be applied for immediately after your Financial Order or consent order has been approved. However, if your Financial Order includes a Pension Sharing Order, you should wait 28 days before you can safely apply for Decree Absolute.
It is recommended you wait because a Pension Sharing Order comes into effect on the later of the granting of Decree Absolute or 28 days from the date of the Pension Sharing Order. Until a Pension Sharing Order has come into effect, it cannot be enforced. Therefore, if you apply immediately for Decree Absolute, which will usually be processed and granted quickly by the Court, your divorce may be finalised before 28 days have passed and the Pension Sharing Order is effective. If you are the beneficiary of the Pension Sharing Order, this leaves you at risk. If your ex-spouse, the member of the pension scheme, dies before 28 days have passed and the Pension Sharing Order has not taken effect, the Order cannot be enforced and, as your Decree Absolute will have terminated your divorce, you will no longer have any protection of any widow/widowers’ pension rights or benefits.
It is therefore vitally important to wait until 28 days have passed from the date the Pension Sharing Order is approved by the Court before applying for Decree Absolute. If your spouse were to die at any point before Decree Absolute has been granted, whilst the Pension Sharing Order will not have taken effect, you would be protected because you retain your widow/widow’s pension rights under any scheme which offers such benefits. Once the 28 days have passed and you receive your Decree Absolute, the Pension Sharing Order will take effect and your pension rights are protected through the terms of the Order.
Whilst it can be frustrating to wait a further 28 days, after what may have already seemed a long process, it can be vital to ensure your pension rights are fully protected.
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