Divorce is complex and emotionally challenging, often involving difficult financial decisions. One critical asset frequently overlooked is the pension, which can be among the largest in a marriage or civil partnership. Ignoring pensions can lead to an unfair settlement and financial insecurity.

Pensions should be carefully considered during divorce settlements to ensure fair asset division, protecting your financial future.

There are three main ways to divide pensions during a divorce:

Pension Sharing
Pension sharing involves splitting a pension fund between both parties, creating two separate pots. Each person can then manage their portion independently. This method is used when both parties agree to a clean break and want control over their retirement funds. It ensures an equitable distribution of assets, providing financial independence post-divorce.

Pension Off-Setting
Pension off-setting allows one party to retain their entire pension while the other receives assets of equivalent value. This method is used when both parties prefer to keep their financial matters separate. It’s suitable when there are sufficient assets, like property or savings, to balance the division. This way, both parties achieve a fair settlement without dividing the pension.

Pension Attachment (Earmarking)
Pension attachment, also known as earmarking, directs a portion of one party’s pension benefits to the other when it is paid out. This method is used when an immediate split isn’t practical. The receiving party gets a share of the pension income or lump sum at retirement. However, it doesn’t provide a clean break since it keeps financial ties between the parties.

A Pension Sharing Order (PSO) is a formal agreement ordered by the court to divide pension assets during a divorce. The court decides the exact percentage split, transferring a portion of one person’s pension to the other, ensuring a fair distribution of retirement funds.

Pension sharing orders need to be sanctioned by a court because they involve legally binding decisions about significant financial assets. Unlike other marital assets, pensions require judicial oversight to ensure fairness and compliance with legal standards.

However, obtaining a PSO doesn’t necessarily mean you need to go to court. We help resolve many cases through mediation or negotiation with the other party’s solicitors. This makes the process smoother and less stressful.

In Northern Ireland, both spouses have legal rights to claim a portion of the other’s pension during a divorce. Eligibility for a pension sharing order generally requires that the couple is legally married or in a civil partnership, and is undergoing divorce or dissolution proceedings.

Obtaining a pension sharing order during divorce is beneficial because it ensures an equitable division of assets, allowing both parties to secure their financial futures independently. It also facilitates a “clean break,” minimising ongoing financial ties and potential disputes.

Pension sharing is a good idea in scenarios such as:

• One spouse has a significantly larger pension fund than the other.
• Both parties want to achieve financial independence post-divorce.
• There are insufficient other assets to achieve a fair settlement.
• One spouse has little or no pension savings of their own.
• Ensuring both parties have secure retirement funds.

Negligence in pension sharing can have serious consequences. If you believe your pension was mishandled during your divorce or dissolution, you’re not alone. It’s surprisingly common for pension assets to be overlooked in financial settlements, leaving eligible individuals without the retirement funds they deserve.

This oversight can lead to significant financial difficulties in the future.

We understand the frustration and stress this can cause. Our compassionate solicitors are here to help. Contact us for a free consultation to see if you can recoup financial losses through a professional negligence claim.

Choosing our pension sharing solicitors ensures you benefit from our extensive experience in handling divorce financial settlements and expert knowledge of pension assets. Trusted by individuals across NI, we assist both young and older couples through various types of divorces and dissolutions.

Our key roles in obtaining a pension sharing order include:

• Providing personalised legal advice and support
• Assisting with financial disclosure and pension valuation
• Facilitating fair and equitable negotiations
• Handling all court-related paperwork and processes
• Ensuring the smooth implementation of the pension sharing order