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Pensions on separation and divorce

Designated benefit

Where the court decides to make a PAO in relation to retirement benefits, part of the member spouse’s benefits is designated for payment to the non-member (or to a person representing a dependent child). This part is called the designated benefit. Once a court has granted a designated retirement benefit, remarriage does not affect payment of the benefit.

The court will rule on the two key factors which will determine the amount of the designated benefit. These are:

  1. the relevant period (i.e. the period over which benefits were earned which is to be taken into account);
  2. the relevant percentage (i.e. the proportion of the benefits earned during the relevant period which is to be allocated to the person specified in the order).

The relevant period may be the period of the marriage but it need not necessarily be so. It must, however, end no later than the date of the granting of the decree of judicial separation or divorce (i.e. the court may not specify a period which ends after that date). This means future benefits cannot be shared.

Details of the relevant period and the relevant percentage will be contained in the order which is served on the trustees of the pension scheme.