DB pension moved to DC after divorce

Latenightmaths

I was given a chunk of my husband's defined-benefit pension after divorce and am a member of the same large scheme from my own employment.  The scheme never includes this chunk in my annual statements on the grounds that "it isn't really yours", and the money now appears to be in a defined-contribution pot.  Can anyone confirm if I'm being taken for several rides here, and whether the scheme would be likely to extract a large fraction if I transferred to a another DC scheme where I also have a small pot?

Brie

As I understand that when one has a pension split due to a divorce it essentially takes the value of the DB pension and makes it into 2 DC pensions.  It's possible that the DB scheme administrators have no easy way to report the DC pensions like this and so just need to do something ad hoc.  They should still be able to give you a value and they should still be able to transfer it out to another DC scheme on reasonable terms.  You can certainly ask for a current value and then ask for a transfer value and see what difference, if any, there is. 

Will the other DC scheme accept a transfer in?  Will they charge anything - likely not, I suspect, but always good to check. 

Marcon

Brie said:

As I understand that when one has a pension split due to a divorce it essentially takes the value of the DB pension and makes it into 2 DC pensions.  

No it doesn't - I'm afraid that's wrong in just about every respect.

Brie said:

It's possible that the DB scheme administrators have no easy way to report the DC pensions like this and so just need to do something ad hoc.  They should still be able to give you a value and they should still be able to transfer it out to another DC scheme on reasonable terms.  

They certainly aren't going to be doing 'something ad hoc'. The court order will have told them what they have to do.

Latenightmaths said:

I was given a chunk of my husband's defined-benefit pension after divorce and am a member of the same large scheme from my own employment.  The scheme never includes this chunk in my annual statements on the grounds that "it isn't really yours", and the money now appears to be in a defined-contribution pot.  Can anyone confirm if I'm being taken for several rides here, and whether the scheme would be likely to extract a large fraction if I transferred to a another DC scheme where I also have a small pot?

OP - what exactly did the court order say? Did your solicitor explain to you how it would 'work'? Is this an attachment (aka earmarking) order (less common these days), or a pension sharing order? Either way, it doesn't sound as if you understand what has happened and that's making you suspicious. 

Latenightmaths

Thanks for your responses.  It was a pension sharing order, with my ex reserving the right to claw it all back if I died.  The solicitor thought it was all staying in the DB pension, but she wasn't a pension expert.  There was an expert involved to come up with a "fair" split but no, DC was never mentioned.  The scheme is generally worthy of any suspicion going, sadly.

Latenightmaths

The court order just defined the split.

Silvertabby

Different schemes have different rules - but there's no way that a DB pension would just be split into 2 X DC pots.

Can you say which scheme this is?  For example, if it's public sector then a PSO order would place the allotted %age into a separate pension credit account in your own name. If non-public sector, then it is possible that you may have to transfer your award into another (DC) scheme.

But I have my reservations about your ex's claim to reserve the right to claw it back should you pre-decease him.  That just can't happen with a PSO, which is your property, so I'm concerned that you may have been misled into accepting an ear-marking order.  This could leave you in a very dodgy position.

Can you clarify?

Marcon

Latenightmaths said:

Thanks for your responses.  It was a pension sharing order, with my ex reserving the right to claw it all back if I died.  The solicitor thought it was all staying in the DB pension, but she wasn't a pension expert.  There was an expert involved to come up with a "fair" split but no, DC was never mentioned.  The scheme is generally worthy of any suspicion going, sadly.

That doesn't sound like a sharing order.

Latenightmaths

Thanks everyone.  It's definitely a PSO, and the order gave my ex permission to request a revocation of that if I predeceased him before taking any pension.  I got no choice about that and could not request the reciprocal.
I'd rather not say which scheme it is, but it's very large, very unpleasant and not public sector.
They're extremely reluctant to give concrete details, so I think the next step for me is to get them to list a whole set of things in writing.  

Marcon

Latenightmaths said:

Thanks everyone.  It's definitely a PSO, and the order gave my ex permission to request a revocation of that if I predeceased him before taking any pension.  I got no choice about that and could not request the reciprocal.
I'd rather not say which scheme it is, but it's very large, very unpleasant and not public sector.
They're extremely reluctant to give concrete details, so I think the next step for me is to get them to list a whole set of things in writing.  

'Permission to request' isn't the same thing as 'reserving a right to claw it all back'. It really is important for you to find out exactly what has been agreed so you know where you stand. 

Schemes are never unpleasant - but some of the people associated with running them may be. It sounds as if your issues lie with those administering the scheme. If they won't give you the information you ask for, expressed in language you have a sporting chance of understanding, then make a formal complaint using the scheme's own Internal Dispute Resolution Procedure (which they will be able to supply, or if there's a scheme website, you should be able to download from there).

Be aware that the trustees won't necessarily know what's going on, so have no qualms about dealing in at least one of the trustees direct if you are fobbed off.

Silvertabby

Have you been made a 'pension credit member' in this pension scheme in respect of your PSO? (This won't affect your own pension in any way).  If not, have you been told that you must transfer out your award to a personal pension?  If the latter, that will be an easy (and cheap) process.

Just musing, but if you were to transfer your award to another pension scheme, then you would be a 'normal' pensioner rather than a pension credit member and, as such, be subject to their rules.  Which almost certainly wouldn't include just paying out to your ex should you pre-decease him.  (I say 'almost certainly' because I haven't seen the exact wording of your Court Order, but it does sound odd).

xylophone

You may find this of interest

https://techzone.abrdn.com/public/pensions/Tech-guide-pension-sharing-div

Death of ex-partner before implementation

Where the member's former spouse or civil partner dies before the pension sharing order has been implemented:

• if the scheme rules permit, the scheme may pay lump sum death benefits and/or survivors' pensions to one or more of the former spouse's or civil partner's beneficiaries
• if the pension credit rights are not used (or not fully used) in this way, the liability is still deemed to be fully discharged. The remaining pension credit rights are treated as a surplus under normal rules

I don't see how your ex husband's arrangement fits with this.