- 19-Apr-2025
- Healthcare and Medical Malpractice
Pension sharing during the dissolution of a civil partnership involves dividing the pension benefits accrued by the partners during the partnership. This process ensures that both parties receive a fair share of the retirement savings built up during their time together. Pensions can be a significant asset in a civil partnership, and the law provides several ways to divide these assets fairly.
A pension sharing order is a legal process through which a pension is divided between the partners. This order is made by the court as part of the dissolution or separation proceedings. The court will determine how the pension should be divided, taking into account the length of the partnership, each partner's financial contribution, and their future needs.
Once the pension sharing order is made, a percentage of the pension is transferred from one partner's pension fund to the other partner’s pension fund. This ensures that both partners have their own pension savings for the future.
Pension Sharing: This involves splitting the pension pot into two, with a portion of the pension transferred into the receiving partner’s pension account. This ensures that both partners have separate, individual pension pots going forward.
Pension Offsetting: In some cases, the value of the pension can be offset against other assets, such as property or savings. One partner may agree to forgo a share of the pension in exchange for a larger share of other assets.
Pension Attachment: Instead of sharing or offsetting, a pension attachment order can be made, which means that one partner will receive a portion of the other partner’s pension payments when they are made in the future. However, this is less common than pension sharing.
The court will assess the value of the pensions involved and decide on a fair distribution. If one partner has a significantly larger pension, the other may be entitled to a portion of it to ensure fairness.
The pension rights of both partners are considered, and the amount to be shared is typically calculated as a percentage of the pension’s total value at the time of the dissolution.
The receiving partner will have their own pension pot created by transferring a portion of the other partner’s pension funds into their own pension account, providing them with their own retirement savings.
A pension sharing order is typically made through a court order during the dissolution of the civil partnership. If both parties agree on how to divide the pensions, they can apply for the order together. If they do not agree, the court will decide on the division.
It is important that both partners disclose all their pensions and retirement savings during the dissolution process to ensure an accurate and fair division.
Length of the Partnership: The court will often consider how long the civil partnership lasted and the financial contributions made by each partner.
Future Needs: The partners' future financial needs, including their ability to support themselves in retirement, will be considered.
Age and Health: The court may take into account the age, health, and retirement plans of both partners.
Once a pension sharing order is made, the pension provider (the institution managing the pension) will carry out the transfer. This may involve setting up a new pension for the receiving partner if they do not already have one.
The receiving partner will be responsible for managing their new pension fund, just as they would manage their own pension savings.
If a couple has been in a civil partnership for 15 years, and during the partnership, one partner built up a pension worth £100,000, while the other partner has no pension savings, the court may order that 50% of the pension be transferred to the partner without a pension. This would result in a transfer of £50,000 worth of pension rights into the receiving partner’s pension pot, ensuring that both partners have a fair share of the retirement savings accumulated during the partnership.
If the partners cannot agree on the division, they can request the court’s intervention to issue a pension sharing order, ensuring both parties receive an equitable share based on their needs and contributions during the partnership.
Answer By Law4u Team
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