In the event of a divorce or dissolution of a civil partnership, you may wish to get legal advice regarding how your LGPS will be affected. You and your partner will need to consider how to treat these pensionable rights as part of any settlement, which can divide your pension in a variety of ways.
Following a divorce or a civil partnership dissolves:
- Your ex-spouse or ex-civil partner will cease to be entitled to a spouse or civil partner pension should you die before them.
- All children's pensions paid to eligible children in the event of your death shall not be affected following the divorce or dissolution
- If you had nominated your ex-spouse or ex-civil-partner to receive any death grant following your death by completing an expression of wish form, this will remain in place unless changed.
This is because the Court may issue an Earmarking Order stating that all or part of the death grant shall be payable to your ex-spouse or ex-civil-partner following your death.
Following an Earmarking Order the LGPS benefits still belong to the member, but some are designated for your ex-spouse or ex-civil partner and your benefits will be reduced.
This allows your ex-spouse/ex-partner to receive all or part of your LGPS pension and all or part of any lump sum payable on your death.
Earmarking has limitations and is not widely used. If your ex-spouse remarries or your ex-civil partner enters into a new civil partnership, any earmarked pension payments would cease and the full pension would be restored to the member. These payments would also cease on your death (although any earmarked lump sum death grant would then become payable to your ex-spouse/ex-civil partner).
Pension Sharing Order
If the Court makes a Pension Sharing Order, part of your benefits will be transferred into your ex-spouses or ex-civil partners possession, and they shall keep these benefits even if your future circumstance change.
Your ex-spouse or ex-civil partner will then hold these benefits in their own right and hold their own individual record with the Clwyd Pension Fund. These benefits can be drawn as though they were member’s pensionable benefits and can be drawn once they reach pensionable age (with any reductions if applicable) or transferred out to another qualifying pensionable scheme.
Similar to any member’s pensionable benefits, this Pension Sharing Order must be taken prior to their 75th birthday.
Effect upon member’s benefits
At retirement, this Pension Sharing Order amount will simply be deducted from the member’s total pension, this deducted amount is known as Pension Debit.
Pension Debit - Similar to deferred benefits, a Pension Debit shall increase in line with cost of living between the date it was first calculated and the date the benefits are paid. Once paid as pensionable benefits to the ex-spouse or ex-civil partner, the re-valued amount of the Pension Debit will be deducted from the member’s retirement benefits.
Members may be able to top up their benefits by buying extra pension through Additional Pension Contributions (APCs) or Additional Voluntary Contributions (AVCs) directly alongside their LGPS benefits, or by paying into a personal/stakeholder pension plan in order to make up for the benefits 'lost' following a Pension Share.
You can still transfer your remaining benefits to another pension arrangement on leaving the LGPS. If you transfer within the LGPS, your new fund will reduce your benefits by the Pension Debit at retirement.
Requesting pension figures for divorce purposes
If your solicitor has asked for a Cash Equivalent Transfer Value (CETV) of your LGPS benefits, this should be requested in writing via email or post.
Please make sure you notify us of your
- Name, NI number and state that you wish to request a CETV for DIVORCE PURPOSES
This is because a different calculation is actioned for CETV for transfer purposes
Offsetting your pension rights
You can offset the value of your pension rights against the value of other financial assets in your settlement. For example, you could keep your pension and your partner could get a larger share of the value of the house.
A further divorce / dissolution
If you remarry or enter into a new civil partnership and then divorce or dissolve your new civil partnership, your remaining pension rights can be subject to further division, although a pension sharing order cannot be issued if an earmarking order has already been issued against your LGPS pension rights.