Pension sharing law: legislation and when orders began

Pension sharing order legislation is mainly the Welfare Reform and Pensions Act 1999, which also wrote the court's power into the Matrimonial Causes Act 1973, and the orders have existed since 1 December 2000.

The core law sits in two Acts and a handful of regulations, with further Acts for Scotland, civil partners and Pension Protection Fund compensation, and which one applies depends on where the divorce is and when it began. This guide sets out the framework in plain English and shows what the start date means for a divorce today. How your own pensions would be divided is for a solicitor and the court. Next to your other retirement income a pension share is one more moving part; an FCA-authorised adviser can take every piece in one conversation, and this page's form lines up that free call for a time that suits you.

Which laws govern pension sharing orders?

In England and Wales the court's power comes from the Matrimonial Causes Act 1973, and the machinery that actually moves the pension comes from the Welfare Reform and Pensions Act 1999. Together they work like this:

Section 24B(1) lets the court make the order on a divorce or nullity of marriage order or "at any time after making such an order (whether before or after the order is made final)", but the order cannot take effect until that divorce or nullity order has been made final. For how the steps run once an order exists, see the timeline guide, and for the basics of what an order does, what a pension sharing order is.

When were pension sharing orders introduced?

Pension sharing orders began on 1 December 2000. The Welfare Reform and Pensions Act 1999 (Commencement No. 5) Order 2000 brought section 19 of the 1999 Act, and Schedule 3, which wrote sections 21A and 24B to 24D into the 1973 Act, into force on 1 December 2000.

The start date works as a cut-off. Section 85(3) of the 1999 Act says no sharing order may be made under section 24B "if the proceedings in which the decree is granted were begun before the day on which section 19 comes into force", and the same bar applies to the variation power in section 31(7B) of the 1973 Act. What matters is when the divorce proceedings began, not when the pension was built up or when anyone asks the court for money.

A divorce that began before that date therefore cannot end with a sharing order. For those cases the court still looks at pension benefits as part of the financial picture under section 25B, and the attachment (earmarking) route is explained in sharing compared with earmarking.

What are the Pensions on Divorce etc. regulations of 2000?

Two sets of regulations made in 2000 carry that name, and a third, made the same year, decides which rights can be shared. Together they handle the paperwork and money around an order.

• The Pensions on Divorce etc. (Provision of Information) Regulations 2000. Regulation 2 says a scheme must give a valuation of the member's pension rights to the member on request, or to the court under a court order. A spouse or civil partner who asks gets other details, including the scheme's schedule of charges. See how to request a valuation.
• The Pensions on Divorce etc. (Charging) Regulations 2000. Under regulation 2, a scheme can recover only the reasonable administrative expenses it has incurred or is likely to incur, and it can charge at all only if it gave written warning of its intention, with a written schedule of charges, ahead of the order. Basic valuation information is given free unless an exception applies, for example where it was already supplied within the previous 12 months. What a scheme can charge is on the cost page.
• The Pension Sharing (Valuation) Regulations 2000. Regulation 2 lists pension rights that are not shareable, which includes rights a person receives as the widow, widower, surviving civil partner or other dependant of someone who has died.

A sharing order comes with an annex, Form P1, which is filled in for the scheme. The form states that it "provides the person responsible for the pension arrangement with the information required by virtue of rules of court". It is covered on the annex page.

Compensation sharing, civil partners and Northern Ireland

Pension Protection Fund compensation. The Pensions Act 2008 added a parallel route for compensation paid by the Pension Protection Fund. Section 109 says when it is activated, and section 111 creates the debit and credit. Both were fully in force from 6 April 2011. The difference between the two kinds of order is explained in pension sharing versus compensation sharing.

Civil partners. Under Schedule 5 to the Civil Partnership Act 2004, paragraph 15, the court may make a pension sharing order when it makes the dissolution or nullity order or "at any time afterwards". That paragraph was fully in force from 5 December 2005, and section 28 of the 1999 Act brings these orders into the same machinery.

Northern Ireland. Section 28 of the 1999 Act also covers a pension sharing order under the Matrimonial Causes (Northern Ireland) Order 1978. This page describes England and Wales; the guide for Scotland and Northern Ireland covers the other two.

Pension sharing law in Scotland

Scotland has its own statute. The Family Law (Scotland) Act 1985, section 8(1)(baa), added a pension sharing order to the orders a Scottish court can make on divorce or dissolution, with effect from 1 December 2000.

The same cut-off applies, but through a different clause. Section 85 of the 1999 Act says that where an action of divorce was brought before section 20 came into force, no pension sharing order may be made under section 8(1) of the 1985 Act. Under section 10, the part of a pension counted as matrimonial property is the proportion built up during the marriage, up to the relevant date.

What the 2000 start date means if you are divorcing now

For a divorce that begins now, the cut-off is long behind you, and pension sharing is one of the tools the court can use. Several limits in the law still decide how it can be used:

• The order cannot take effect until the divorce order is final. Because section 24B allows an application "at any time after" that order is made, a sharing order is not tied to the date of the divorce itself; see applying after the decree absolute.
• Section 24B bars a sharing order where an earmarking requirement under section 25B or 25C is still in force on that pension.
• Scheme charges depend on the schedule each scheme issues, and the court can allocate them between you under section 24D.

What the shares would be worth, and whether to trade a pension for other assets, is an adviser and solicitor conversation. While the court process runs, a possible pension share can be weighed against your other income in retirement by an adviser who phones after you leave your number in the short form here. The pensions and divorce overview gives the wider picture.

Common questions about the law behind pension sharing

Does the law allow a second order on a pension already shared?

Not between the same couple. Section 24B bars a sharing order on a pension arrangement that is already the subject of one, or that has already been shared between the two of you.

Does the law cover the State Pension?

The 1973 Act refers to "shareable state scheme rights" as well as private pension rights, and Part IV of the 1999 Act has a separate chapter for them. How that works for your State Pension is in the State Pension and divorce guide.

Is there a delay before an order can take effect?

Section 24C says no order may take effect before the end of a period set by regulations. The practical steps and dates are on the timeline page.

Which rights count as shareable?

Section 21A points to Chapters I and II of Part IV of the 1999 Act for what can be shared, and regulation 2 of the Valuation Regulations 2000 lists exclusions. A scheme's valuation shows which of your benefits it counts; for what a share would mean beyond that, the short form here brings a free ring from an adviser.