Pensions Adjustment Order
When you are getting divorced or a judicial separation, the courts may decide to share the marital assets to ensure that the former spouses and children are provided for.
In most circumstances the family home is the most valuable asset. However, your pension or your former partner’s pension may be a valuable asset too. The judge can decide to divide the pension assets through what’s called a Pension Adjustment Order.
How can I find out details of my spouse’s pension?
If divorce proceedings have begun, each spouse is required to list out their property and income and provide it to the other spouse. Pensions are included in this requirement.
In addition, the Courts can instruct the pension scheme trustees to provide the relevant information within a specified period. However, to avoid additional expense of obtaining a Court Order, the spouse who is a member of the scheme should provide this information.
The key relevant information that must be provided by the Trustees is as follows:
- Date which the member first qualified for retirement benefits
- Current pensionable salary or salary at the date when they left service
- Details of an AVCs paid
- Details of any benefits transferred into the scheme from another scheme
How is the share of the pension benefits calculated?
The ‘designated benefit’ is the portion of the member’s benefits that are due to the ‘non-member’. This is calculated based on two key factors – the ‘relevant period’ and the ‘relevant percentage’.
The Relevant Period:
This is the period of reckonable service that the designated benefit is deemed to be accrued. This is often the period where the couple were married (but this isn’t always the case). The period can run up to the date of the decree of judicial separation or divorce but not after it. This means that future benefits cannot be shared.
The Relevant Percentage:
This is the portion of the benefits earned during the relevant period that is to be allocated to the spouse.
How is the share of the pension paid?
By default, the benefits will usually start when the member of the scheme claims their retirement benefits.
However, the spouse may decide to have their benefits paid on an independent basis. This means that the spouse’s benefit will no longer be affected by the decisions of the member spouse. A transfer value is calculated to provide independent benefits for the spouse. This can be either in the same scheme or can be transferred to another pension.
Options for Independent Benefits
Independent Benefits can be established in 3 ways:
- Independent Benefit in the current scheme
- Independent Benefits in a different occupational scheme
- Independent Benefits in a PRSA or a Private Retirement Bond
How do I get started?
If you would like advice on what to do with your proceeds from a Pension Adjustment Order:
- Have a chat with an Irish Pensions advisor – call (01)8570655, fill in the form below to arrange a call, or start a conversation using our Online Chat (click the icon on the bottom right of the screen).
- The advisor will ask you some simple questions to identify what you need and how your money should be invested.
- They will compare pension providers and fund managers to find the most suitable pension for you.