Pension Adjustment

Orders

In the context of judicial separation or divorce, a pension adjustment may be made for the benefit of an applicant spouse on behalf of the dependent family members. The order may be granted at the time of judicial separation or divorce or anytime afterwards.

The court must consider whether, having regard to circumstances, proper provision has been or can be made under the other possible provisions that could be made. The court need not make a pension adjustment order if the totalities of other orders, as varied, if applicable, is enough to make proper provision for dependent spouses or children.

See the section on pensions in relation to pension benefits and pension policies.

Notice to Trustees

Pension trust rights cannot be varied by separation agreement. A court order is required.

The trustees must be given notice of the application. They must be entitled to make representations.

The pension trustees must be given notice of the application. They are entitled to make representations in relation to the application and order.

Adjustment Order

The pension adjustment order may relate to all or certain pension provisions or benefits under the order. It may refer to retirement benefits or death-in-service benefits. This may include insurance, death-in-service like benefits, as well as survivor and other benefits.

An adjustment order in relation to retirement benefits may apply to benefits under the scheme which have accrued at the date of the order. The court must specify the period over which the retirement benefits were earned, which are to be taken again. The relevant proportion should be allocated to the spouse and dependent children.

Left in or Transferred

As with pension benefits generally, the benefits may be left in the scheme to accrue for the benefit of the designated spouse or dependents. Alternatively, they may be moved to a different scheme or held separately.

In this event, the amount which is transferred should be held separately within the same scheme or in an external scheme. This may include a scheme in which the dependent spouse is a beneficiary.

The trustees may choose to transfer to another scheme, even if the spouse does not so choose.

Death

If the dependent spouse dies before the benefit commences, the amount must be paid to his or her estate within three months. If the dependent spouse dies after the benefit has commenced, there may be a payment to the estate of the beneficiary spouse of the actuarial value of the amount which would have been payable had both spouses continued to live, adjusted by the fact that this benefit would not terminate during the lifetime of the spouse who was a member of the scheme.

If a member’s spouse dies and a sum for the benefit of the other spouse remains in the scheme, its actuarial value is payable to the estate of the beneficiary spouse.

Contingent Benefits

A contingent benefits order relates to the life insurance elements of a pension scheme. An application may be made within 12 months of the making of a decree of judicial separation or divorce.

It deals with the allocation of the death in service benefit. It may be made for the benefit of the spouse and/or dependent children,

Cessation

A pension adjustment order may cease in the following circumstances:

• death in service benefits
• where the member spouse is no longer an employee or a member of the scheme.
• death of the dependent spouse named
• remarriage of the dependent spouse.
• when a dependent person not a spouse, ceases to be a dependent

Variation

The pension adjustment order may not be made in favour of the spouse who is remarried at the time of the proceedings. However, a retirement benefits order will not be affected by remarriage. A contingent benefit order will terminate.

A pension adjustment order may itself be varied by a subsequent application unless the court stipulates that it cannot be subsequently varied. A death in service benefits order cannot be varied.

On a judicial separation for any period during the lifetime of a member spouse, the court may make an order directing trustees of the scheme to disregard the separation of spouses, where this would disqualify a dependent spouse. Under the rules of many schemes, benefits may be otherwise disapplied under the rules of the scheme.