Pension sharing Order - Set Aside

I got divorced six years ago which included a PSO on the Final Salary Pension Scheme which had closed to contributions five years earlier.

Five years later I was provided with a statement by my Pension Scheme together with a bonus offer to tempt me to transfer it out and realised the PSO had not been enacted. The associated CETV had more than doubled.

The Pension scheme were not aware of a PSO on the pension until the financial advisors I had employed to facilitate the transfer, advised the administrators. However the details of the PSO were not sufficient enough for them to enact the PSO. So they now need a court to issue more complete details or for the PSO to be set aside, before they will do anything more.

I am at the age where I am now able to withdraw a sum tax free, but my ex still has six years to go. We are agreed that, if possible, we would like to set aside the existing PSO, then, after I have transferred it out, set up a new one for a specific amount. Separate to this agreement I would also arrange to pay her a lump of cash obtained by using my tax free option.

How viable does this sound? It is relatively easy to, with mutual agreement,

1) Set aside an existing PSO?

2) Request a PSO with either a specific amount, or, of 100% to her if I transfer the originla pension into two separate funds?

Hmm. Have you any idea why the PSO was not enacted? Did you both have solicitors? WAs the PSO submitted to the scheme but just not enacted?

The thing is, the PSO would presumably have given you each a pension within the scheme - and you would each then be able to make decisions about whether to stay in or opt out. You would have continued to build your fund, hers would have remained as it was.

Opting out of a gold plated financial salary scheme is a big decision ad she would need independent financial advice about the wisdom of this.

So there are a number of issues: What should the value of her share be? You could just base it on CEV then and CEV now and adjust the percentages accordingly and then make an application to the court for a variation.

Should the PSO be enacted BEFORE you leave the scheme - this really should be her decision - if she had her own pension pot, she would presumably have been presented with an incentive to leave and could then take advice on the wisdom or otherwise of doing so.
Bear in mind that if it turned out to be a bad idea, at least it would have been her decision and any action re potential mis-selling could be taken by her.

Would your decision about leaving the scheme be different if you were working with a smaller CEV?

Should you be sharing the residual pension post lump sum and the lump sum. If so how would that affect the percentages? She would not be able to take another lump sum when she reaches pension age.

Depending on the amounts involved, you may need a bear with a much bigger brain to work some of this out - an actuary would be your best bet.

I would suggest going back to the original legal teams to try to unravel what has happened - and if there are cost implications to sorting it out, see if you can claim against them or get them to fix things for you.


Hadenoughnow

Hi Hadenoughnow

Many thanks for your response and apologies it’s taken me so long to respond. The offer provided by my pension fund has now expired hence I’ve had to restart the process again and request a new CETV.

Just to address a couple of your points…..

I don’t know why the PSO was never enacted in the first place. We both had solicitors. I received details of the final divorce from my solicitors a month after it happened and though it outlined what the arrangements were, regarding the financial settlement, I had no instructions regarding actions that were required on my part. I simply saw that there was the PSO based on what I knew had been agreed and that this had to be done within four months by the pension administrators after their receipt of the details. I assumed this would have been an instruction that went to them directly from the court.

What other assets there were from the marriage went to my ex. I was left with considerable debts that were all in my name (all of my own making I might add). These debts are still around and a reason why I want to move the pension and take the 25% tax free cash. The debts include a couple of ccjs which I am coming under increasing pressure to satisfy at work as part of my requirement to be a “person of good conduct”.

I am of the understanding that my pension is only open to members, ie employees of the firm. Hence, if the administrators had received the PSO, they would have been required to transfer out the proportion owed to my ex to a pension of her own.