Marital Breakdown: Your Pension Rights
Almost one in every 20 people living in Ireland is divorced or separated (4.7% of us), according to the most recent census. This means just over 222,000 citizens have been affected by marital breakdown.
A pension is often a couple’s most valuable asset, aside from property.Ultimately, the courts will decide how any pension is divided up when two people end their marriage.
A Pension Adjustment Order (PAO) can only be made by a judge through the courts when granting a decree of judicial separation, divorce or dissolution. Either spouse can apply to court for such an order once a decree has been granted but it is more cost effective to agree all financial arrangements at the same time. A PAO will not be made if the applying spouse has remarried. Separate PAOs are required for each separate private pension arrangement (for example if either or both spouses contributes to a separate AVC arrangement).The family court is not bound to grant a PAO and may decide instead to make other financial orders relating to savings or the family home.
One typical example of a PAO is if one partner has a work pension and the other partner, who stayed at home to raise a family, has none. The court can order part of the pension be paid to the non-working spouse or to a dependent child. The percentage designated by the court applies to the pension, the tax-free lump sum and any death- in-service benefits, if applicable.
If both spouses work and are members of occupational pension schemes, they might decide to agree that neither will make a claim over the other person’s pension at a future stage. However this is only legally binding if secured by a PAO.
Pension scheme trustees are legally obliged to disclose a certain amount of information to a non-member spouse following a PAO. If a spouse/civil partner refuses to disclose the details of their pension their partner can seek this information directly from the trustees of the pension scheme under the provisions of the Pensions Act 1990.