Navigating Police Pensions During Divorce | What You Need to Know

Divorce is often a complex and emotional process. Aside from the family home, pensions are often the most significant financial asset to consider when reaching a financial settlement. For members of the police force, pensions can be especially valuable, and equally complex.

If you are a police officer facing separation or divorce, it's crucial to understand how your pension could be affected. Police pension schemes are some of the most generous in the public sector, but their rules are intricate. Early advice from a family law solicitor experienced in police pensions can make a significant difference in protecting your financial future.

Understanding the Police Pension Schemes

There are a number of police pension schemes in operation, such as the 1987, 2006 and 2015 schemes. Each has different retirement ages, benefit structures, and rules. It's not uncommon for police officers to hold entitlements across more than one of these schemes, which can further complicate the division of pensions in divorce proceedings.

Disclosing Pension Information in Divorce

As part of the divorce process in England and Wales, both parties are required to provide full financial disclosure, including details of all assets, income, and pensions. This is done through a document known as Form E.

If you have a solicitor, they will be able to assist and guide you through this process to ensure that you comply with all of the requirements.

As part of the disclosure procedure, you will need to obtain a valuation of your pension, usually referred to as a Cash Equivalent Transfer Value (CETV). This is usually free of charge to obtain once a year, though fees may apply if your pension is already in payment.

Why CETV’s May Not Tell the Full Story

While CETVs are used for initial assessments, they are not always reliable, particularly in public sector pensions like those for police officers. These valuations can often fail to reflect the true value or benefit of the pension, especially in relation to future income.

Consequently, it may be necessary for you and your spouse to obtain a formal report from an actuary, often referred to as a Pension on Divorce Expert (PODE).

The PODE will provide an independent assessment of the pension and how it should be shared as part of your divorce. This can be done on the basis that the capital value of the pension is to be shared between both of you, or more commonly, how the pension income on retirement can be shared between you and your spouse.

How Pension Sharing Orders Work

In many cases, the outcome of a financial settlement will involve a Pension Sharing Order (PSO), where a court order instructs a transfer of a percentage of the pension to the other party.

For police pensions, this is typically done via an internal transfer, meaning the funds remain within the scheme but are held in a separate, independent account in the recipient’s name. The scheme administrators usually charge a fee for implementing this, often split between both parties.

The McCloud Remedy and Its Impact on Police Pensions

Sharing police pensions on divorce has also become more complicated in recent years following the McCloud case. The McCloud judgment found that changes to public sector pensions discriminated based on age. As a result, the Government introduced a remedy to address this, affecting many serving officers’ pension entitlements.

The McCloud remedy rules are complex and may have a considerable impact on the outcome of pension sharing. A PODE expert will be able to advise both of you on the potential impact of McCloud on your case.

The Importance of Specialist Legal Advice

Police pensions are not like private pensions—they come with their own set of rules, benefits, and potential pitfalls. That’s why it’s essential to consult a specialist family solicitor with experience in police pension schemes at the earliest opportunity.

At Hegarty, our experienced family law team is well-versed in the complexities of police pensions and divorce. We work closely with trusted PODEs and financial experts to help our clients achieve fair and financially secure outcomes.