Dividing pensions on divorce is often one of the most complex and most important elements of reaching a fair financial settlement. This case demonstrates how Tees supported a client in navigating intricate pension arrangements to achieve long-term financial security in retirement.
For context
Our client, *Susan, separated from her husband, *Martin, after more than 30 years of marriage. Susan had previously worked in the NHS but gave up her career several years earlier to care for her family and support Martin in running the family business.
Susan instructed Amber, an Associate in Tees’ Family team, to assist in negotiating a fair financial settlement.
The case involved complex pension arrangements, including multiple defined benefit (DB) schemes of significant value, pensions already in payment, and crystallised funds. With both parties approaching retirement, ensuring a fair outcome in respect of pensions was critical to Susan’s future income and financial independence.
What happened next
Martin held substantial private pension provision exceeding £250,000, made up of both defined contribution (DC) and defined benefit (DB) schemes. This included a valuable Armed Forces pension worth over £100,000. By contrast, Susan’s pension provision was significantly lower and, on its own, insufficient to meet her retirement needs.
During proceedings, Martin unilaterally crystallised his largest pension. Amber acted quickly to secure robust assurances from Martin’s solicitors to ensure that Susan’s financial claims were not prejudiced by this action.
Recognising the complexity of the pensions involved, Amber advised Susan to obtain expert input. A Pension on Divorce Expert (PODE) report was commissioned, with additional questions raised to account for (“add-back”) the pension funds Martin had withdrawn.
Following receipt of the report and attendance at a Financial Dispute Resolution (FDR) hearing, Amber successfully argued that an element of add-back should be applied. The Judge indicated that a 100% pension sharing order in respect of the Armed Forces pension would be appropriate.
Martin was initially reluctant to share the pension due to its significant value and guaranteed benefits. He sought further time to consider whether equivalent income could be achieved through alternative arrangements. Susan, keen to maintain an amicable relationship, was open to this. Amber ensured that strict time limits and cost protections were put in place to safeguard Susan’s position.
Why Tees made a difference
- Specialist pension expertise: Clear advice on the differences between defined benefit and defined contribution schemes, ensuring Susan understood the long-term implications
- Strategic use of expert evidence: Commissioning and interrogating a PODE report, including securing “add-back” of withdrawn pension funds
- Proactive risk management: Acting swiftly to protect Susan’s position following the unilateral crystallisation of pension assets
- Strong negotiation at FDR: Successfully securing a judicial indication supporting a 100% share of the Armed Forces pension
- Client-focused approach: Balancing Susan’s wish to remain amicable with the need to protect her financial future
- Commercial and practical advice: Identifying that alternative proposals would not deliver equivalent retirement income
- Outcome-driven strategy: Securing a pension sharing order that delivers equality of income and long-term financial security
Giving you the full picture
If you are dealing with a divorce involving pensions, especially complex or high-value arrangements, expert advice is essential.
Contact Tees today to speak to our specialist Family team and secure a settlement for now and the future.
*Names have been changed to protect the privacy of those involved.
