Pension sharing order

Susibee · 10 January 2019 at 5:17PM

I recently discovered that a pension sharing order in my ex husband’s favour ten years ago has been ‘revalued’, i.e increased’, by my pension scheme each year since the order was actioned. This means that in addition to the original pension transfer, my pension and lump sum has been further eroded each year and I suspect will continue to be eroded in future.

Is this a common way of dealing with pension sharing orders and do all pension schemes apply similar rules?

crv1963 · 10 January 2019 at 5:23PM

Susibee wrote: »

I recently discovered that a pension sharing order in my ex husband’s favour ten years ago has been ‘revalued’, i.e increased’, by my pension scheme each year since the order was actioned. This means that in addition to the original pension transfer, my pension and lump sum has been further eroded each year and I suspect will continue to be eroded in future.

Is this a common way of dealing with pension sharing orders and do all pension schemes apply similar rules?

When the order was made was there a time limit on it for it to be actioned? My ex had 5 years to do so, but it did not mean I would lose any more from my pot, she was entitled to 40% of it at the time of divorce, not at the time she actioned the order.

Is the uplift simply the pot size earmarked for him has grown, in which case your pot has not been eroded but has also grown by the same percentage?

Browntoa · 10 January 2019 at 5:24PM

If it's a deferred pension then it continues to benefit from any increases that the pension scheme gives

https://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/when-relationships-end/pension-sharing

Susibee · 10 January 2019 at 5:37PM

The order for 30% from my pension was actioned almost immediately after our divorce. I’d been led to believe at the time that it was a full and final settlement, the transfer happened straightaway, and there was no ongoing liability, i.e everything I contributed to my pension after that was then 100% mine.

However, as you say it looks like his pot has grown further as my pension pot and lump sum has been reduced from what it would have been without the ‘revaluation’. Looks like I was just given rubbish advice about the ongoing implications of the sharing order.

Silvertabby · 10 January 2019 at 5:50PM

Susibee wrote: »

The order for 30% from my pension was actioned almost immediately after our divorce. I’d been led to believe at the time that it was a full and final settlement, the transfer happened straightaway, and there was no ongoing liability, i.e everything I contributed to my pension after that was then 100% mine.

However, as you say it looks like his pot has grown further as my pension pot and lump sum has been reduced from what it would have been without the ‘revaluation’. Looks like I was just given rubbish advice about the ongoing implications of the sharing order.

Are you are sure that your pension has been reduced? It is my understanding that once the PSO has been activated, then there is no further link between the two records. Yes, your ex's pension will have increased due to the application of cost of living increases, but not at the expense of your pension.

Susibee · 10 January 2019 at 6:45PM

I finished work late last year and my deferred pension statement showed, for the very first time, the revaluation of the PSO figure.

So in effect the PSO figure has been revalued by around a thousand pounds for the pension pot and three thousand pounds for the lump sum. I now realise that my pension pot and lump sum figures have been reduced gradually by these total amounts over the last ten years. So the figures they show in my deferred statement are my full pension and lump sum pots minus the revalued figures, not the original PSO figures.

When I asked the pension scheme why that was, all they did was tell me the calculation they used, not why they use it.

Silvertabby · 10 January 2019 at 7:26PM

Susibee wrote: »

I finished work late last year and my deferred pension statement showed, for the very first time, the revaluation of the PSO figure.

So in effect the PSO figure has been revalued by around a thousand pounds for the pension pot and three thousand pounds for the lump sum. I now realise that my pension pot and lump sum figures have been reduced gradually by these total amounts over the last ten years. So the figures they show in my deferred statement are my full pension and lump sum pots minus the revalued figures, not the original PSO figures.

When I asked the pension scheme why that was, all they did was tell me the calculation they used, not why they use it.

Are you sure this is a PSO and not some sort of other pension sharing agreement? With a PSO there is no way your ex's revalued pension details would be reflected on your benefit statement.

Can you post which pension scheme you are in?

hyubh · 10 January 2019 at 7:30PM

Susibee wrote: »

This means that in addition to the original pension transfer, my pension and lump sum has been further eroded each year and I suspect will continue to be eroded in future.

Do you mean, your ex-spouse had a cash-equivalent transfer value to take out of the scheme, or did he instead get a 'pension credit' membership in it...?

When I asked the pension scheme why that was, all they did was tell me the calculation they used, not why they use it.

Is this civil service final salary...? Assuming your ex-husband had a pension credit in the scheme (rather than a CETV to take out of it), one scenario is that your whole-time equivalent pensionable pay has failed to keep up with inflation. So, while his deferred pension has increased by CPI (this is assuming a public sector scheme), the value of your final salary pension it was taken out of has decreased in real terms. Ergo, the debit to your pension has increased to maintain the value of his pension credit.

Susibee · 10 January 2019 at 7:56PM

Good call. It is the civil service pension scheme. Both my husband and I were members of the scheme at the point of the pension sharing order (which is how it’s described in the letter I received from the pension scheme in 2009). The letter said that 30% of my benefits as at the effective date in August 2009 be transferred to him and ‘used to provide him with benefits of equivalent value’.

The letter I received recently regarding my deferred benefits doesn’t refer directly to my ex husband’s benefits or pension details. It does show for the first time though the direct impact of the scheme revaluing the original PSO figure. So yes it does feel like my pension has been reduced to maintain the value of his credit.

Perhaps that’s what I should have always expected, rather than a clean break and no ongoing liability.

Tom99 · 10 January 2019 at 8:36PM

Susibee wrote: »

Good call. It is the civil service pension scheme. Both my husband and I were members of the scheme at the point of the pension sharing order (which is how it’s described in the letter I received from the pension scheme in 2009). The letter said that 30% of my benefits as at the effective date in August 2009 be transferred to him and ‘used to provide him with benefits of equivalent value’.
The letter I received recently regarding my deferred benefits doesn’t refer directly to my ex husband’s benefits or pension details. It does show for the first time though the direct impact of the scheme revaluing the original PSO figure. So yes it does feel like my pension has been reduced to maintain the value of his credit.
Perhaps that’s what I should have always expected, rather than a clean break and no ongoing liability.

[FONT=Verdana, sans-serif]A pension sharing order is a clean break on the date the pension co implement the court order.[/FONT]
[FONT=Verdana, sans-serif]Are you sure its not just the way its been presented to you?[/FONT]
[FONT=Verdana, sans-serif]Just as an example, say you pension was worth 100 and the sharing order was 30% so 30.[/FONT]
[FONT=Verdana, sans-serif]On day 1 you have 70 your ex 30, total 100[/FONT]
[FONT=Verdana, sans-serif]Say 5 yrs on there has been a 50% increase so[/FONT]
[FONT=Verdana, sans-serif]You have 105 your ex 45, total 150[/FONT]
[FONT=Verdana, sans-serif]If you are still being told how much your ex's 30 is now worth it might seem as if its increasing at your expense but its not as you have received the 50% increase but only on the 70 you retained.[/FONT]

Susibee · 10 January 2019 at 8:46PM

Thank you for explaining in those simple terms, It is definitely confusing how they are presenting it to me. If they had not shown the revalued figure after all these years I would not have been any the wiser, nor would I have been so surprised to see it set out in that way.

Thanks all for your input. I really appreciate it.

Pension sharing order

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