In practical terms, Pension Sharing is broken down into a three stage process.

Gathering information

The first stage is gathering information in order to make the Pension Sharing Order a possibility.

The pension assets of the couple will usually be listed at the time divorce proceedings begin, typically on a financial claim form known by the Courts as ‘Form A’.

It is important that the spouse states their intention to seek a share of the pension assets on this form.

Both parties can then apply for a valuation of the pension scheme assets. A number of different types of information can be requested at this stage, including a valuation of pension benefits, an explanation of how this value was calculated by the trustees, details of which benefits are included in
the valuation and which benefits were excluded, finding out whether the pension scheme can offer an external transfer (pension credit) to the ex-spouse, and obtaining a list of the charges that will be imposed by the pension scheme when the sharing order is made.

This information must be provided by the pension scheme without charge. If the information is requested by the Court or a member of the pension scheme, it must be provided within three months. If the spouse requests this information, the pension scheme must provide it within one month of the request.

There are some exceptions to these rules and timescales. If the pension scheme has already provided a valuation of benefits during the past year, the trustees may make a charge for providing the updated information. They may also make a charge if the scheme member is within one year of
his or her scheme retirement age.

It is important for the divorcing couple to notify the Court of their intention to seek a pension sharing order within two weeks of the detailed financial statement (Form E) being exchanged.

Notifying the pension scheme

The second stage is to let the pension scheme know that there may be a pension sharing order imposed at some stage in the future. At this time, some more detailed information can be requested and they must provide this.

This more detailed information includes the full name and address of the pension scheme, details of any previous pension sharing order or any other orders (such as bankruptcy or earmarking) that have already been applied to the pension scheme benefits, details of any pension rights which cannot be shared, details of the charges the trustees will impose and when these will become payable, and confirmation of whether the member is also a trustee of the scheme.

Pension schemes must provide this information within 21 days of it being requested following the pre-order notification. Trustees can make a charge for providing this additional information, if they wish.

Implementing the pension sharing order

The third stage is implementing the pension sharing order. Once it has been granted by the Court, the pension scheme trustees then have a four month deadline to complete the discharge of the pension credit to the ex-spouse.
Within 21 days of the implementation of the pension sharing order, the scheme trustees must provide a notification to the member and ex-spouse.

There are some circumstances where the pension scheme trustees can extend these deadlines. This is typically where the pension scheme is being wound up or where an ongoing dispute over the valuation of pension scheme benefits still needs to be resolved.

Once the pension scheme credit has been discharged to the ex-spouse, the scheme trustees have to notify the member and ex-spouse within 21 days.

This notification has to include the value of the pension credit applied to the ex-spouse (and corresponding pension debit applied to the member), the value of the remaining pension fund or benefits, details of how the pension credit was discharged and how any charges were met.

Charges for implementing a pension sharing order can be paid by the member or ex-spouse, paid out of the pension fund or paid out of the pension credit to the ex-spouse.

Once the pension sharing order has been implemented, the ex-spouse will receive a pension credit.  This can be used for either an external or internal transfer, depending on circumstances and scheme rules.