Pension sharing order

RichEE

I've contributed to a final salary scheme with a 33.33% PSO from 2004. My ex transferred out of the scheme that year. I'm now in payment 2019 and I can confirm that my pension has been reduced by the full 33.33%. So it's not been a clean break for me.

My understanding is that the original white paper on PSO was ambiguous on how pension companies apply the ruling. So really worth checking the pension provider although i can guarantee they wont want to tell you.

My experience of Tom99s Example

Given 100 with PSO 33.33%
My ex Transfer Value 33.33 at year of divorce

Given hard work and promotions a 50% increase
Total value 150
My Value 100 (66.66% of the total)
My Ex Transfer value 33.33
The remainder 16.66 apparently is absorbed for the benefit of scheme.

Tom99

RichEE wrote: »

I've contributed to a final salary scheme with a 33.33% PSO from 2004. My ex transferred out of the scheme that year. I'm now in payment 2019 and I can confirm that my pension has been reduced by the full 33.33%. So it's not been a clean break for me.
My understanding is that the original white paper on PSO was ambiguous on how pension companies apply the ruling. So really worth checking the pension provider although i can guarantee they wont want to tell you.
My experience of Tom99s Example
Given 100 with PSO 33.33%
My ex Transfer Value 33.33 at year of divorce
Given hard work and promotions a 50% increase
Total value 150
My Value 100 (66.66% of the total)
My Ex Transfer value 33.33
The remainder 16.66 apparently is absorbed for the benefit of scheme.

Since its a final salary scheme in 2004 then the PSO was implemented they years you had then earn would be reduced by 33.33%, so if you had 9 full years service in 2004 that would be reduced to 6 yrs full service.
The years you have worked since the PSO would add a full yr so if you had worked until 2014 you would have 6+10=16yrs service.

bowlhead99

RichEE wrote: »

I've contributed to a final salary scheme with a 33.33% PSO from 2004. My ex transferred out of the scheme that year. I'm now in payment 2019 and I can confirm that my pension has been reduced by the full 33.33%. So it's not been a clean break for me.

My understanding is that the original white paper on PSO was ambiguous on how pension companies apply the ruling. So really worth checking the pension provider although i can guarantee they wont want to tell you.

My experience of Tom99s Example

Given 100 with PSO 33.33%
My ex Transfer Value 33.33 at year of divorce

Given hard work and promotions a 50% increase
Total value 150
My Value 100 (66.66% of the total)
My Ex Transfer value 33.33
The remainder 16.66 apparently is absorbed for the benefit of scheme.

The way you are describing it, you had built up an entitlement of 100 and gave a third of it away - so ex would get 33.33 of the 100 and what you have built up to that point was only going to entitle you to 66.67 right? Because your service to that point was partially 'given away' ; a third of the qualifying years would go to your ex and not your own pot.

Then given your hard work and promotions you increased that remaining entitlement of 66.67 by 50%, so you get 1.5 x 66.67 which is 100 at retirement. Meanwhile the ex did not do any more work or gain promotions so they just ended up with the 33.33 that had been agreed way back when.

If that's unfair, what am I missing... Did you expect your hard work and promotions to increase your pot to 116.67, i.e. by 75% from the level of 66.67 which you had kept for yourself at the time of the sharing order?