Family Law Blog

Pension Sharing Orders: A Study

20 March 2014, by Taylor King Family Law Solicitors

Taylor King frequently deal with cases involving pensions, including police and overseas pensions. Recently they acted on behalf of a husband who obtained a pension sharing order in respect of his wife’s pension.┬áThe first detailed study into pension sharing on divorce has recently been published – this article explores its findings.

The study was conducted by Hilary Woodward and Mark Sefton of Cardiff Law School. The report was designed to provide an insight into when and how pensions are included in financial remedy proceedings. Its findings suggest that pension sharing is a positive addition to financial remedies but that such orders are still uncommon.

When dealing with a case involving pensions there are three available options:

  1. Pension sharing
  2. Pension attachment
  3. Pension offsetting

The most common way of approaching pensions on divorce remains offsetting. Offsetting is where one party is compensated for the loss of interest in their spouse’s pension by that person receiving a greater share of other assets, most commonly the matrimonial home.

The key findings (of a study of 293 cases) are as follows:

  • In 20% of the case studies neither party disclosed any pension other than a basic state pension.
  • In 66% one or both parties disclosed a pension other than a basic state pension but no pension sharing order was made.
  • Just 14% of cases included one or more pension sharing orders.
  • All but two pension sharing orders were made in favour of the wife.
  • Pension sharing orders were more likely where both parties were legally represented.
  • Pension sharing orders were more likely between older parties with longer marriages.
  • There was little evidence of expert reports but when reports were obtained most judges and practitioners were positive about their impact.
  • The time, cost and fees associated with pension disclosure, expert reports and implementation of pension orders acted as deterrents to the making of pension orders.
  • Practitioners and judges expressed concern about the ability of litigants in person to deal fairly or at all with pensions on divorce and about the increasing number of litigants in person in family cases.

Read the full report here: [pdf]