If the Court decides that a Pension Sharing Order is to be implemented then, as a pensioner member, you will have a deduction made from your pension from the effective date of the order.
Your ex-spouse or partner will have the choice of either:
- a pension credit in the Local Government Pension Scheme (LGPS), or
- to transfer their share of the Cash Equivalent Value (CEV) to a qualifying pension arrangement.
Reduction to your pension
The Pension Sharing Order will detail the percentage of your pension rights that should be transferred to your ex-spouse or partner. For example, if you currently receive an annual pension of £5,000 and the Court awards your ex-spouse or partner 50% of your pension, then your annual pension will reduce to £2,500.
Calculation of your ex-spouse or ex-partner's pension
If they leave their pension credit in the LGPS, the percentage of the CEV awarded to them will be used to calculate their pension. This amount will not be the same as the reduction in your pension as different factors are used to calculate the ex-spouse or partner's pension.
Payment of your ex-spouse or ex-partner's pension
If they leave their pension credit in the LGPS, the payable date for their pension depends on when you stopped paying into the scheme.
If you stopped paying in before 1 April 2014, their pension credit is payable at age 65. They can choose to take their pension from age 55 but it will be reduced for being paid earlier.
If you stopped paying in after 31 March 2014, their pension credit is payable at their normal pension age. They can choose to take their pension from age 55 but it will be reduced for being paid earlier.
This could mean that, if a Pension Sharing Order is implemented, your pension will be reduced immediately but your spouse or partner will not receive their pension payments until later.
As the Pension Sharing Order will become effective after you have become a pensioner member then your ex-spouse or partner will not be able to take a tax free lump sum. If they leave their pension credit in the LGPS, or if they decide to transfer them to an alternative pension arrangement, they will be unable to convert part of their pension to create a lump sum.