Divorce

Getting divorced is never easy. Here is some essential information that will help you understand how getting divorced may affect your pension.

If you divorce, a court may decide that some or all of your Fund benefits should be shared with your ex as part of the divorce settlement.

In most cases, the court would make a ‘pension sharing order’ to split your benefits between you and your ex (or, the court could decide to ‘earmark’ a percentage of your benefits to be paid to your ex when you retire or die, but this is less common).

To split your benefits, they would need to be valued, and the court-decided percentage/value would be transferred out of the Fund to an approved pension arrangement chosen by your ex. Your own Fund benefits will reduce accordingly. Please note that the value which is considered by the court when making a pension sharing order is only estimated. If the court orders that a percentage of your benefits is split for your ex, this will be a percentage of the value at the time the order is implemented (i.e., when the funds are transferred to your ex’s pension scheme). That amount may be higher or lower than at the time the court order is made. If the court orders a set amount to be split for your ex (which is possible under Scottish law) the portion of your pension which this amount uses up will vary between the time the court makes the order and the time the order is implemented.

A step-by-step guide to managing your Fund benefits in a divorce

Facing redundancy

If you are being made redundant, there are 3 things you should know about your benefits:

1. You could pay some of your redundancy payout into the Fund

   This might be a tax-efficient way to boost your retirement income, but you’ll need to keep an eye on the government limits on how much you can contribute and save without paying tax.

   Tax and you – before taking your benefits

2. If you’re age 55 or older, you can take your Fund benefits straight away

   Some members may receive their benefits without reduction for early payment. You would need to check your terms of redundancy to know if this applies to you.

3. Get advice

   It’s always a good idea to get independent financial advice if you are considering either of these options, to check that they are right for you.

   Get advice

Ill health

If you’ve been off work for a long time (usually five years and six months) because of ill health, or you’re getting long-term disability payments that have run out, you may be able to take your benefits from the Fund early.

Usually, if you take your benefits earlier than your Normal Pension Age, how much you receive every year is reduced, because they will likely be paid for longer. How much you will receive in the case of ill health will depend on your circumstances, and we’d ask you to go to a medical assessment for which we’ll pay. In this way, your pension might not be reduced in the same way as it would be if you were in good health.

Please see your Schedule Factsheet for the details, including how the Trustee and bank assess what you’re entitled to.

Power of Attorney

If you have a Power of Attorney, they can help you to make decisions about your pension benefits.

To let us know you have a Power of Attorney, we'll need the necessary documentation signed and held on our records. This includes the original or certified copy of the Power of Attorney document, or the original or certified copy of the Court of Protection Order (if applicable). If you have any questions on what documentation you need to provide, please contact us.

We can also give your Power of Attorney access to your pension record. They'll then be able to view information about your benefits, update your details and manage your pension benefits on your behalf.

They should request access by contacting us. For security reasons, we’ll check we have the necessary documentation signed and held on our records before we give them access to your pension record.