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In the event of divorce or dissolution of a civil partnership

In the event of divorce or dissolution of a civil partnership, you may wish to get legal advice from your solicitor on how to deal with your LGPS benefits.

You and your partner will need to consider how to treat your pension rights as part of any settlement.  You can divide your pension by offsetting you pension rights , earmarking Orders, or take advantage of pension sharing orders (or qualifying agreements in Scotland).

You will need specific information about your LGPS benefits for divorce/dissolution purposes, including judicial separation or nullity. You or your solicitor should contact your pension fund administrator for specific information including an estimate of the cash equivalent value (CEV) of your pension rights.

In Scottish divorces/dissolutions, only the value of the pension rights built up during the period of the marriage/ civil partnership are taken into account.

You can usually get one free CEV estimate each year. Any other costs for supplying information or complying with a court order will be recovered from you and/or your ex-spouse/ex-civil partner in accordance with a schedule of charges, published by your pension fund administrator.

Be sure to review your expression of wish form to ensure it’s kept up to date, especially if you have previously nominated your ex-spouse/ex-civil partner to receive any lump sum payable on your death.

Offsetting 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.

Earmarking Orders  

When the court makes an earmarking order, your LGPS benefits still belong to you, but some are earmarked for your ex-spouse/ex-civil partner.  The earmarked benefits will be paid to your ex-spouse/ex-civil partner and your benefits will be reduced.

English law allows your ex-spouse/ex-civil partner to receive all or part of your LGPS pension and all or part of any lump sum payable on your death.

Scottish law allows your ex-spouse/ex-civil partner to receive 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 you. 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 orders (qualifying agreement in Scotland)

If the court makes a pension sharing order (or your benefits are subject to a qualifying agreement in Scotland) part of your benefits are transferred into your ex-spouse's/ex-civil partner's possession. They will keep that share even if your or their circumstances change.

Your pension and any subsequent spouse's /civil partners pension will be reduced by the amount allocated to your ex-spouse/ex-civil partner at the point of divorce/dissolution as would, if you were an employee who contributed to the LGPS in England or Wales after 31 March 2008 and who left the Scheme after that date, any pension payable to a nominated co-habiting partner.  Any eligible child's pension that becomes payable on your death is not reduced because of a pension share.

Another 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.