Pension Sharing

Divorce is not the best of times. It is emotionally draining no matter what the relation between the spouses is. Still, it is suggested that however difficult it might be, one must not look to vindicate himself/herself and try to be separated on amicable terms. This way, there is far lesser trauma on the children. This point is reiterated by Family law experts as well as specialist divorce attorneys. There are various key issues pertaining to a divorce. There may be questions regarding alimony, visitation rights, and child custody and so on. In a similar vein, pension sharing is also an integral part. This is true for average earning spouses and even truer for the high-end income earners who may have a large bag of post-retirement pension funds.

Earlier the splitting of pension could be done in either of the two ways; it could be done through offsetting or earmarking. This led to certain disputes as both the methods had their fallacies. The latter could be jeopardized with the remarriage or death of a spouse and the former could be on shaky territory in terms of equal settlement of assets. This brought the needs of pension sharing and the family law experts are busy praising the format since its inception.

Pensions & Divorce: First things first, pension sharing cannot be reached through an out-of-court settlement. Various attributes of matrimony cannot be technically documented and evaluated without a legal stamp. While property and a certain amount of non-grey investments can still be divided out of court but the retirement benefits need to pass through various legal filters. Most of the times, the parties arrange the disbursal of retirement benefits via their divorce attorneys and court is only a required for a formal consent.

Generally, pension sharing is dealt with after the divorce however, a small window for pre-decree is made available; the variations can be made only during this period and not after the final decree of divorce or annulment is made official. Rates of annuity are based on life expectancy considerations and age of spouse (at times there is a huge gap in age of husband and wife). This is why it is often discussed that the women generally expected to live longer will have to work over a larger fund and hence the order of split shall be biased in favor of women; this is debated at large and there is no conclusive legal order regarding it yet.