The divorce process and the resolution of financial matters are two distinct issues to be dealt with on separation. The divorce process is usually far more straightforward and faster than determining the division of finances. Therefore, in many cases, we find that people have to wait until their financial situation has been finalised before applying for Decree Absolute/ Final Order which is the final stage in the divorce process and brings the marriage to an end.
The financial arrangements can be resolved in two ways: through an agreement reached between the parties which is approved by the Court in a Consent Order or the Court making an order itself at a final hearing. In either situation, once a financial order has been made or approved by the Court most people are keen to finalise matters as soon as possible and conclude the dissolution of their marriage.
The dissolution of the marriage is achieved by obtaining the Decree Absolute or in divorce cases that commenced after 6 April 2022, the Final Order. These terms will be used interchangeably for the purpose of this article. In cases where a Pension Sharing Order has been agreed, there will usually be a justified delay in concluding the divorce.
Pension Sharing Orders
A pension sharing order sets out how much of a pension(s) will be given to you or your ex-spouse. This makes pensions different to other marital assets, such as the family home – which can be transferred to one spouse or the other.
If there is no Pension Sharing Order then Decree Absolute can be applied for immediately. However, if your financial order includes a Pension Sharing Order, you should first wait 28 days before you can safely apply for Decree Absolute.
Why do you have to wait for Decree Absolute if there’s a Pension Sharing Order?
You have to wait because a Pension Sharing Order comes into effect on the later of the granting of Decree Absolute or 28 days from the date of the Pension Sharing Order. Until a Pension Sharing Order has come into effect it cannot be enforced. Therefore, if you apply immediately for Decree Absolute, which will usually be processed and granted quickly by the Court, your divorce may be finalised before 28 days have passed and the Pension Sharing Order has come into effect. If you are the beneficiary of the Pension Sharing Order this leaves you at risk. If your ex-spouse, the member of the pension scheme, dies before 28 days have passed and the Pension Sharing Order has not taken effect, the order cannot be enforced and, as your Decree Absolute will have finalised your divorce, you will no longer have the protection of any widow/widower’s pension rights or benefits.
It is important to wait 28 days
It is therefore important to wait until 28 days have passed from the date the Pension Sharing Order is approved by the Court before applying for Decree Absolute. If your spouse were to die at any point before Decree Absolute has been granted, whilst the Pension Sharing Order will not have taken effect, you would be protected because you retain your widow/widower’s pension rights under any scheme which offers such benefits. Once the 28 days have passed and you receive your Decree Absolute the Pension Sharing Order will take effect and your pension rights are protected through the terms of the order.
So, whilst it can be frustrating to have to wait for a further 28 days, after what may have already been a long process, it can be vital to ensure that your pension rights are protected.
If you have any further inquiries regarding pension sharing order please feel free to contact our Family Team we would be happy to help.