Please note that the questions and answers below are worded in respect of divorce. However, they’re equally valid in the case of a dissolution of a civil partnership.
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Compensation Sharing Order post scheme transfer
Earmarking
Pension Sharing Order pre scheme transfer
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Before my former pension scheme transferred to you, I divorced and the court issued a Pension Sharing Order (PSO) which was implemented by my pension scheme. What does this mean for my compensation?
As your PSO has already been implemented by your former scheme, your compensation won’t be affected further.
The court issued a PSO during the assessment period, but the trustees didn’t implement the Order before my former pension scheme transferred to you. What happens now?
In line with legal requirements, we’ll need to implement the Order. Once implemented, we’ll let you know how this affects your compensation.
Following my divorce I was awarded a pension credit in my ex-spouse’s pension scheme. The scheme is now transferring into the PPF. How will this affect my pension credit?
You’ll now become a member of the PPF and will receive a welcome pack explaining how much compensation you’ll receive and when it will be paid.
Following my divorce I was awarded a share of my ex-spouse’s pension. However their pension scheme has now transferred into the PPF and the trustees didn’t implement the Order before the scheme transferred. How will I receive my share?
In line with legal requirements, we’ll need to implement the Order. Once implemented we’ll let you know how much compensation you’ll receive and when it will be paid.
If I divorce after my former pension scheme transfers to you, can the court make an Order that my compensation is shared with my former spouse/former civil partner?
The court can make an Order so that your compensation can be shared with your former spouse/civil partner.
This Order is known as a Compensation Sharing Order, and is different from the Order you would have required had your former pension scheme not transferred to us. Please contact us for further information regarding this matter.
Do I need to tell you if I’m getting divorced or seeking to dissolve my civil partnership?
Yes. You can write to us at:
Pension Protection Fund
I’ve been asked to send details of my compensation to the court for divorce purposes. What do I need to do?
If as part of any divorce proceedings you’re asked to provide a valuation of your compensation benefits, you should ask us for a Cash Equivalent Value (CEV). This is the value of your benefits from the PPF as a lump sum.
I’ve been provided with a CEV by the PPF. My ex-spouse’s solicitor is now asking for further information as to how a certain percentage compensation share might provide my ex-spouse as a compensation credit. Is the PPF able to provide more detailed information?
It’s not within the remit of the PPF to estimate the compensation that may become payable to a credit member following the issue of a Compensation Sharing Order (CSO). An independent financial advisor may be able to estimate the potential compensation credit payable based on the CEV supplied by the PPF and the assumptions provided on the professional pages of the PPF website
However, caution is advised as, due to the variable factors involved, the CEV can vary significantly between the provision of the original CEV, the issue of a CSO, and the eventual implementation of the Order.
What happens if the court then decided to issue a CSO?
A CSO is a Court Order splitting the compensation you’re entitled to between you and your ex-spouse, who’ll then become a PPF member with their own entitlement to PPF compensation. We’ll write to you in due course to let you know how this will affect your own compensation.
Further information is available in the ‘Sharing your compensation if you divorce or end a civil partnership’
I’m going through a divorce and my partner is member of a scheme that’s in the PPF. My solicitor has told me that I’m to become a compensation credit member. What does this mean and what will I receive?
This means that, as a result of a Compensation Sharing Order (CSO), you’ll become entitled to a share of your ex-spouse or civil partner’s compensation. When the Order is implemented, you’ll become a member of the PPF and we’ll let you know how much compensation you’ll receive and when it will be paid.
I’m a compensation credit member. What compensation will I receive?
Details of your compensation amount would have been sent to you when we shared your ex-spouse’s compensation. Please contact us if you’d like to know what this amount is now.
Before my former pension scheme transferred to you, I divorced and part of my pension was earmarked by the court for my ex-spouse. What does this mean for my compensation?
If part of your pension was earmarked by the court, this means that part of your compensation will become payable to your ex-spouse or civil partner when you retire. We’ll automatically take this into account when paying your compensation.
Part of my ex-spouse’s pension was earmarked to me by the court. However, their pension scheme has now transferred to the PPF. How will this affect me?
The PPF will act on the earmarking order in the same way as the previous scheme would have done and will make any payments to you directly. You should keep us informed of your address so that we may contact you at the relevant time.
If your ex-spouse’s compensation is already in payment, you should keep us informed of any changes to your bank account details.
Is it still possible for an earmarking order to be made against my PPF compensation?
Yes. However, any changes to your own circumstances will have a direct impact on what your ex-spouse receives. This isn’t the case with a Compensation Sharing Order (CSO).