How much of my armed forces pension is my ex entitled to? - Family Law Partners

How much of my armed forces pension is my ex entitled to?

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How much of my armed forces pension is my ex entitled to?

Prospective clients will often email me and ask how much of their armed forces pension their ex-partner is entitled to. However, there is no formula for calculating the amount of your pension that your ex is entitled to, even for an armed forces pension, due to the factors I explain below.

When assets are divided upon the breakdown of the marriage there are a series of factors which are considered (known as the Section 25 Factors because they are taken from section 25 of the Matrimonial Causes Act 1973). All these factors are discretionary, which means they can be applied in different ways for different couples. These factors include looking at the age of the parties, whether there are children, earning capacities, length of the relationship and needs.

My experience is that there are two main approaches taken by couples when dividing pensions on divorce, and these approaches are usually supported by the court.

  1. Long marriages

The first question to address is what a long marriage is and again, there is no set rule on this. (I should state from the outset that when we consider the length of a marriage, we will include any time the couple cohabited prior to the marriage as part of the overall length of the marriage.) 12 years can be considered a long marriage, 15 years will nearly always be a long marriage and 20 years plus is a long marriage.

For couples where there is a long marriage the pension will almost always be divided equally. I will explain more about what “equal” means below.

  1. Shorter marriages

For a short marriage, which is often viewed as a relationship of less than 4 – 6 years, but this is not a definitive length, I often find that couples will share the pension which was accrued during the relationship equally and keep the pension they brought to the marriage for themselves.

Please note that in “needs” cases there is often a view that pensions should be divided equally. A “needs” case is one where the pension assets are not large enough to meet outgoings in retirement. However, it is recognised that this is a somewhat simplistic approach and that there is a need to look at all the circumstances of the case.

What does “equal” mean?

When a pension is shared, decisions have to be made on how a pension is to be valued and what is to be equalised. This is detailed on page 17 of PAG2. For some pensions, we will equalise the capital values and for other pensions, we will look to share them to equalise the pension retirement benefits. Each pension scheme will have its own rules as to how to calculate the capital value and what the pension provides by way of retirement benefits. Even if two pensions have the same cash equivalent value (CEV), this does not mean their capital values are the same. For instance,  a CEV of an armed forces pension of £100,000 will provide very different retirement benefits to a personal pension (often held with a high street provider) with a CEV of £100,000.

For all these reasons it is usually advisable to instruct a pensions on divorce expert (known as a PODE) to prepare a report on your pensions and to work with a legal advisor or mediator before doing so to work out the questions you wish to ask of the pension expert.

Equalising a pension is not straightforward. Trying to work out how to share the pension accrued during the relationship period is even harder and again, an expert’s advice is important.

Why can’t I just work out if my relationship is a long one or a short one and apply one of the above approaches?

To illustrate why it isn’t as simple as this, I have set out two hypothetical scenarios below.

Scenario 1

A couple have been married for 14 years. However, the husband has paid into his armed forces pension for a total of 35 years, i.e. for 21 years before the marriage. Is it fair to divide this pension equally when almost 2/3 of the pension was accrued before the marriage? Should the wife benefit from receiving half the pension?

That will depend upon the other factors which apply to this couple. Are there capital assets which need to be divided? How old are the parties? Does the wife still work? Has the husband already retired and is he drawing from the pension? Are there dependent children? In some situations, sharing the entire pension would be a fair outcome, in others it would be unfair.

Scenario 2

A couple have been married for 5 years. The husband has paid into his pension for 11 years. The parties have two children and the wife has given up her career to care for the children, one of whom has a disability and requires extra care.  She has not paid into a pension for the last 5 years and will only be able to work part time for the next few years as she will continue to be the primary carer of the children which will enable the husband to work full time and continue to contribute to his pension. Should the wife only share in the pension accrued during the relationship?

Again, we need to look at all the other factors, but we do have a little more information about the couple in this scenario. Without children, it may be fair to only share the pension accrued during the relationship, but the needs of the children and how they impact upon the wife’s ability to return to work could mean that it is fair to share the entire pension.

As can be seen from the above examples, every situation will turn on its own facts. There is no one way  to calculate how to share an armed forces pension (or any other pension) on divorce. You will need expert legal advice and usually a report from a pensions on divorce expert to work out what is the right approach for your situation.

Hazel Manktelow is an expert family solicitor in Hampshire, and advises clients in Petersfield, Clanfield and the surrounding areas.

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