Employers' Guide
Section 18 - Pension Sharing
Contents
1. Requests for information 2. Premature Retirement Compensation (PRC) 3. Retirement BenefitsLegislation allows the current value of the teacher’s pension benefits to be shared as part of a divorce settlement or when a registered civil partnership is legally dissolved.
1.Requests for Information
The first stage towards Pension Sharing is that TP are asked to provide a Cash Equivalent Transfer Value (CETV). Legislation requires the CETV to be valued up to the date the request is received in TP. As TP is not the employer, the teacher’s service and salary details held in TP are not up to the current date. Teachers are told to contact you to obtain their current details. You must return the completed form to the teacher, who will sends it to TP as part of their request for a CETV.
A further request for up to date service and salary details will be sent to you by TP if the case proceeds to Pension Sharing.
Back to the top2. Premature Retirement Compensation (PRC)
Pension Sharing does not apply to mandatory compensation or discretionary enhancement. You should not be asked to provide CETVs or to implement Pension Sharing for those benefits.
Back to the top3. Retirement Benefits
You should be aware that if you obtain service details from TP that no reduction in service will be applied when a teacher is subject to Pension Sharing. Instead the benefits payable in respect of that service are reduced. Retirement benefits in these cases are calculated as follows:
- Calculate the benefits as normal, i.e. as if no Pension Sharing has occurred;
- Apply index-linking (up to the date of retirement) to the basic amount of reduction in the benefits, which was calculated at the time of Pension Sharing;
- Deduct 2. from 1 to get the reduced amounts payable.
The benefits that are reduced are the pension, lump sum and widow(er)’s / adult nominated beneficiary’s pensions (short-term pensions, where the member dies in service, are unaffected). All children’s short and long-term pensions are unaffected.
Further information about Pension Sharing is available for members in the fact sheet Pensions on divorce and in the leaflet Pensions on divorce and dissolution.
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