Pension Adjustment Orders – What you Need to Know
On separation and prior to the dissolution of a civil partnership or divorce, a decision needs to be made as to how a couple’s assets will be distributed. Pensions are considered a matrimonial asset and are taken into account in this distribution. They are often a very valuable asset after the couple’s matrimonial home.
A pension adjustment order is when the court orders that a pension holder shares a pension with a former partner and any dependents. The powers of a Court in this regard are contained in section 12 of the Family Law Act, 1995 and section 17 of the Family Law (Divorce) Act, 1996.
Usually, the court orders a portion of the pension to be paid to the partner who does not have a job and always worked at home. The apportioned pension amount will then be placed into another pension fund in the name of the former spouse/partner. Multiple pension adjustment orders can be made if there is more than one private pension arrangement.
The pension adjustment order will then be served on the trustees or providers of pension arrangements to pay the apportioned pension benefits to the former spouse or dependent family members.
In addition, a pension adjustment order is only granted after a decree of divorce. It should be applied for before the person remarries, otherwise, they may not be entitled to the pension benefits of an ex-spouse.
What Does the Pension Adjustment Order Specify?
A pension adjustment order will specify factors such as:
- Relevant Period – It is equivalent to the period of reckonable service of the member before the divorce. The order served on the trustees of the pension scheme will contain details of the relevant period (the commencement and cessation date).
- Relevant Percentage – Relevant percentage (0.01% to 100%) is the amount of pension fund given to the other spouse.
Aspects of Pension Adjustment Order
Ear-marking and pension splitting are two aspects of pension adjustment. Under earmarking, the beneficiary of the pension adjustment order is entitled to a percentage of pension benefits.
Pension splitting means the designated amount is transferred to the same or separate pension scheme for the other spouse.
Dealing with pensions on divorce/dissolution is quite complicated, so it is very important to get legal assistance to file pension adjustment order applications.
Disclaimer:
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Connaught Law and authors accept no responsibility for loss that may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Connaught Law. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Connaught Law.
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