9 January 2025
Options for teachers experiencing pension problems in divorce
By Rob Colwell, Director, Hayes + Storr.
Many teachers and other public sector workers are unable to finalise their divorces due to delays in receiving pension valuations from the Teachers’ Pension Scheme. A recent BBC story raised some of the issues that those going through the process were experiencing. These unacceptable delays are causing real problems for those who simply wish to reach financial settlement and move on with their lives.
1. Delays in Pension Valuations: Teachers and some civil servants are unable to proceed with their divorces because the Teachers’ Pension Scheme has been struggling to provide Cash Equivalent Transfer Valuations (CETV), which are needed for divorce settlements. Even when the figures come back, many are then expected to instruct pension actuaries who take months to complete their calculations.
2. Backlog Issues: A significant backlog of cases has developed due to changes in how pension valuations are calculated, stemming from the McCloud judgment, which introduced more complex processes.
3. Emotional and Financial Impact: The delays are causing severe emotional and financial stress for those involved, including added legal fees and the inability to move forward with their lives. Some are stuck paying mortgages and facing financial uncertainty due to the delays.
4. Government’s Response: The Department for Education acknowledges the delays, citing the complex nature of the calculations and the need for specialised staff. They aim to clear the backlog by February 2025.
5. Lack of Support: Many affected individuals feel unsupported by the system, expressing frustration with the slow progress and lack of communication from the Teachers’ Pension Scheme. Some have turned to MPs to raise their cases.
These delays in pension valuations are exacerbating the emotional and financial toll on individuals going through divorce. It is however important that couples use this time constructively and try and resolve all other financial issues.
If parties wish to move on with their lives during this time, it may be possible to discuss the possibility of a deed being drawn up, called a Separation Agreement, to “plug the gap” until it is appropriate to request a judge seal a Consent Order and Pension Sharing Annex. These deeds aren’t suitable for everyone and if you wish to discuss the matter then do not hesitate to contact one of the lawyers in our team. They can be done relatively quickly in a matter of weeks and might provide some reassurance to the parties to enable a property sale to proceed, or an interim lump sum paid to enable one of the parties to move on with their lives.
The Government have indicated that they hope the transfer value backlog will ease in the coming months, but some parties don’t have the luxury of time. If you want to discuss your position and the options available to you then contact Rob Colwell in the family law team on 01328 863231 or email rob.colwell@hayes-storr.com.
BBC article – ‘I can’t get divorced as I can’t get my pension valued’
https://www.bbc.co.uk/news/articles/cn08nvpl50no
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
