The Pearson Pension Plan

Going through a divorce can be a stressful and difficult time, but we are here to help. Pension benefits must be included in your list of assets, as your benefits will be considered when the court decides how your finances should be settled.

To find out how much your pension savings are worth you will need to ask all your pension schemes to provide you with a Cash Equivalent Transfer Value (CETV) for divorce purposes.

Divorce can also lead to changes in your circumstances, so it is important to update your details if they have recently changed.

• If you do need to update your personal information, please complete a change of details form
• If you would like to update your beneficiaries, you will need to complete an expression of wish form

Links to both forms can be found at the bottom of this page along with other useful links. 

The options are available for your pension.

• Offsetting

  It is possible to offset the value of your pension against another marital asset, such as your house or other types of saving, so you keep your pension but receive less of another asset. If you agree to use offsetting, then we do not need to be informed as your pension is unaffected.

• Earmarking

  Earmarking orders assign part of your pension or lump sum to your ex-spouse/civil partner. The assigned benefits normally come in to payment when you retire or die. This type of order does not provide a clean break on divorce or dissolution and therefore is not commonly used.

• Pension sharing order

  A pension sharing order is a legal arrangement made during a divorce or dissolution where the court determines how your retirement savings should be shared with your ex-spouse/civil partner. The pension sharing order provides a clean break on divorce and is now the most common way to share pension benefits. We have detailed below the steps needed in obtaining a pension sharing order and how this might affect your pension. 

How do I start the process of getting a pension sharing order?

The first thing you will need to do is request a Cash Equivalent Transfer Value (CETV) for divorce purposes. The quote provides an up to date valuation of your benefits, the value will not be guaranteed. The transfer value will be recalculated once the pension sharing order is received.   

You can request a transfer quotation for divorce purposes by clicking on the information request link at the bottom of the page. Please make sure that you mention that the quotation is needed for divorce purposes so that the pensions team can send you the correct paperwork. 

Once you have all the information that you need about your assets, we recommend that you take advice to assist you in making any decisions. There are no costs involved in obtaining the quotation, however if you decide to proceed with the pension sharing order, the Plan will charge to implement it. Details of the charges will be provided with the quotation. 

• What information is needed to implement a pension sharing order/annex?

  To start the implementation of the pension sharing order, we will need the following; 

  • the Pension sharing order/annex, stamped and dated by the court
  • the Final Order, stamped and dated by the court
  • payment of charges (currently £2,000), the court order will specify who is responsible for paying this 
  • information about your ex-spouse’s chosen receiving arrangements including their bank details and the HMRC Screen Print 

  What happens during the implementation period?

  Once we have received all our requirements, the percentage of the pension share will be deducted from your pension and the value will then be paid to your ex-spouse/civil partner’s chosen pension arrangement. We need to complete the process within four months, although we generally implement pension sharing orders much quicker than this. 

• How much does it cost to implement a pension sharing order/annex?

  To cover the actuarial and administrative costs, there is currently a flat charge of £2,000. The pension sharing order will detail which party is responsible for paying the charges. 

  The charge applies to all active, deferred and pensioner members of the Plan and is reviewed on a regular basis. The charge must be paid before the implementation period can begin. 

• When will I be told that the process has been completed?

  We will let you know as soon as the pension sharing order has been implemented by writing to you and all other parties to confirm that the pension share has been paid.

Frequently Asked Questions

• How long does it take to process a pension sharing order?

  This is one of the most common questions we receive. Unfortunately, it is difficult to provide an accurate estimate as cases vary depending on when all requirements are received to start the implementation period.  

• How are transfer values calculated?

  If you are a member of the Auto-Enrolment (AE) or Money Purchase 2003 (MP03) Sections, then the transfer value will be calculated based on the current value of the pension pot.

  If you are a member of one of Pearson’s Defined Benefit (DB) sections, we will calculate your transfer value for you. The tools that the team use for the calculation are reviewed by the Trustee who regularly considers advice from the Plan’s actuary to ensure that the value is right at the time the team calculate it.

• Can the transfer value change from the original quotation?

  Yes, it is very likely the value will change for both DB and DC Sections. The value will be recalculated once the pension sharing order and all other requirements are received.  

• How is the transfer value calculated if you are an active member of the Plan?

  If you are an active member and still contributing into the Plan, your transfer value at the quotation stage will be calculated with an assumed date of leaving, in most cases this will be the day of calculation. 

  When we implement the pension sharing order, the value will be calculated at the date on the order.

• How will the pension debit affect a pension already in payment?

  The annex to the pension sharing order will specify the percentage of the pension to be transferred to the former spouse or civil partner and the member’s pension in payment will be reduced by the same percentage. 

  We will reduce pension payments as soon as we can to limit the likelihood of overpayments of pension being made which would need to be recovered.

• Can I share my pension without going to court?

  No, the only way to share a pension is by using a court order.  

• I wasn’t married or in a civil partnership, can I still share the pension?

  No, we will only be able to split a pension from a legal partnership. This is because we require a document from the court that shows that your marriage or civil partnership has ended.

• I got divorced outside of the UK, can I still share my pension?

  No, to share a UK pension, the pension sharing order must be from a UK court. If you divorced outside the UK, we recommend that you seek legal advice to establish your options.

• Can the ex-spouse/civil partner’s benefit remain in the Plan?

  No, the pension credit must be transferred out of the Plan to another approved pension arrangement.  Your ex-spouse/civil partner will not be able to remain in the Plan.