Implementing a Pension Sharing Order: The 4-Month Countdown

A Pension Sharing Order (PSO) is a powerful tool in divorce and financial remedy proceedings, allowing one party to receive a share of the other’s pension. But a PSO is only as good as its implementation. Many people believe that once the court seals the order, the job is done. In reality, the process is far from over, and missing a single step can cost you thousands—or even leave you with nothing.

The Timeline: What Happens After the Court Order?

Once the court approves your financial settlement and issues a PSO, the process moves from the courtroom to the pension scheme. Here’s how it unfolds:

1. Sealed Order and Pension Sharing Annex The court will issue a sealed Pension Sharing Order, accompanied by a Pension Sharing Annex (Form P1, P2, or P3, depending on the type of scheme). The annex contains the technical details the scheme needs to implement the split—such as the percentage to be transferred and the identity of the parties.

2. Serving the Order on the Pension Scheme You (or your ex-spouse, depending on the order) must send the sealed order and annex to the pension scheme administrator. This should be done within 7 days of receiving the documents from the court. Don’t forget to include the scheme’s required administration fee, which typically ranges from £50 to £200. If you’re unsure of the correct address, use the Pensions Regulator’s database—sending it to the wrong address is a common cause of delay.

3. The Implementation Period Once the scheme receives all the correct paperwork and the admin fee, they have up to 4 months to implement the order. This is known as the “implementation period.” During this time, the scheme will process the split, create a new pension pot for the receiving party (if applicable), and adjust the original member’s benefits.

4. Implementation Notice At the end of the process, the scheme must send both parties an Implementation Notice. This document confirms that the credits and debits have been applied, and sets out the new values. Only at this point is the pension share truly yours.

Common Pitfalls and How to Avoid Them

The process sounds straightforward, but there are several traps that can derail your PSO:

Wrong Scheme Address It’s surprisingly easy to send the order to the wrong department or address, especially with large or merged pension schemes. Always check the Pensions Regulator’s database or contact the scheme directly to confirm where legal documents should be sent.

Missing CETV (Cash Equivalent Transfer Value) A PSO is unenforceable without a valid CETV. This value must be up-to-date and included in the annex. If the CETV is missing or out of date, the scheme may refuse to implement the order, and you’ll have to return to court to correct the paperwork.

Unpaid Administration Fee Pension schemes will not process a PSO until their admin fee is paid in full. If you’re unsure of the amount, ask the scheme in advance. Some schemes will return the documents if the fee is missing, causing further delay.

Foreign Pensions and Valuation Issues Not all pensions are created equal. In Goyal v Goyal [2016] EWCA Civ 792, the Court of Appeal refused to enforce a PSO against a foreign pension valued in rupees, highlighting the importance of ensuring the scheme is UK-based and the valuation is in pounds sterling. If your case involves an overseas pension, extra care is needed—UK courts cannot enforce orders against foreign schemes.

Timing and Deadlines The 4-month implementation period only starts once the scheme has everything it needs. If you delay sending the documents, or if the paperwork is incomplete, the clock doesn’t start. This can be critical if you’re relying on the pension share for retirement or to meet immediate financial needs.

Practical Tips for Self-Representing Parties

• Double-check the scheme’s address and contact details before sending anything.

• Make sure the CETV is current and included in the annex.

• Pay the admin fee promptly and keep proof of payment.

• If you don’t receive an Implementation Notice within 4 months, chase the scheme—delays can and do happen.

• Keep copies of all correspondence and documents sent to the scheme.

A PSO is a valuable right, but it’s not automatic. The process requires attention to detail and prompt action. By following the correct steps and avoiding common mistakes, you can ensure your pension share is secured without unnecessary stress or loss.

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Disclaimer: This blog post provides general information for educational purposes only. It is not legal advice. Outcomes can vary based on your personal circumstances.