Hartnell Chanot: Divorce/Family Law Solicitors Exeter, Devon

Police Pensions

Your Police Pension is not
a capital asset,
a pension is an income stream.

Although police pensions are treated like any other asset of the marriage, they are not a capital asset, a pension is an income stream and will always remain as such.

There are 2 main ways in which your police pensions can be dealt with: -

1. Offsetting.
   This is where we would look at compensating one party for the loss of interest in their spouse's pension by giving that person a greater share of the other available assets (for example the home). This will depend upon the value of your police pension and the value of the other assets. In relation to police pensions, this is likely to mean that the value given to the pension by the police pension administrators (CETV) is likely to be challenged by the spouse of the officer. This is because it is an unfunded scheme which means that if a person were to buy a similar pension with the additional benefits received by a police officer; it would cost more money and would be valued higher. A revaluation of the pension is likely to increase the value of the pension and would lead to an officer receiving less of the other available assets. However if the officer wanted to keep his entire pension then this is usually the best option.
   
2. Pension sharing.
   This is where one part of the officer’s pension is taken and paid into a pension which is set up within the scheme for their spouse. After the pension sharing order is implemented, any further contributions made by the officer will only go towards their own pension, not their spouses. An officer therefore has the ability to build his pension back up before retirement. However the closer the officer is to retirement the less likely that will be. If the pension is in payment when a pension sharing order is made there are two consequences, the retired officer receiving the pension will immediately lose a proportion of his income as the pension is split. His income will now come from the remaining proportion of his pension. His spouse however, will not receive that income until she reaches retirement age. In those circumstances, other options will need to be considered. Those options could include a pension attachment order, or a deferral of the pension sharing order being made.
   
   Please Note: As from April 09 if the pension is in payment and a Pension Sharing Order is made, the pension trustee now has the option (not mandatory) of making payments immediately to the spouse rather than the member losing his/her income now and the spouse not gaining any income now - though individual schemes do have to change their rules to allow early payment. Please contact us and we can advise you further as to whether your scheme has changed their rules to allow this. New regulations are being introduced in 2010 which will restrict the payment to a minimum age.
   

What is the best option for you?

There are many advantages/disadvantages of both options, and the option which is most suitable to an individual will depend on their circumstances and the other assets which may be in dispute. We are however able to advise on the options that an officer may face in relation to their pension.

Pension Attachment Orders

There is a third option which can be considered in relation to pensions, namely a pension attachment order. This is where an order is made that once the pension is in payment, the spouse of the Officer receives a proportion of the income and or lump sum. They receive this direct from the pension administrators. This order can be useful if a pension is already in payment as it means the spouse receives the money immediately rather than waiting until she is 60 or 65. It is also advantageous to the Officer, as a pension attachment order would normally stop on a spouse's remarriage. However as the pension is split at the date of payment, any contributions made by the officer post divorce, will also increase the amount of money that his spouse receives. This option is used less frequently but can be the most suitable order in some circumstances.

What we require to be able to advise you about your police pension:

• Cash Equivalent Transfer value (CEVT) or Cash Equivalent Benefit (CEB) if the pension is already in payment. You need to contact the administrator of the scheme and request this as soon as possible as it is likely to take the administrator some time to provide this information, you should not be charged for requesting this information.
• The date you joined the pension scheme, as this will tell us which police pension you have. If you have changed between the pensions schemes, you will need to let us know this.

For advice on Police Pensions in Divorce please contact one of our Police Divorce Team on 01392 421777.

The Police Pension Scheme

NPPS - This pension is a statutory scheme, based on the Police Pensions Regulations 2006, made under the Police Pensions Act 1976. All regular police officers in the United Kingdom who joined on or after 6 April 2006, or who wish to transfer, may belong to it.

You can find out more detailed information on accessing the  NPPS Members Guide or visit the Home Office Police website