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Armed Forces Pensions in Finances

If you are currently going through a divorce due to the irretrievable breakdown of your marriage and serve (or have previously served) in the armed forces, you may be concerned about what will happen to your military pension and financial future.

Armed Forces Pension Scheme (AFPS) pensions are one of the most complex and convoluted pensions that we come across in family law. Due to their multifaceted nature and various benefits, it is very important that armed forces pensions are dealt with appropriately to ensure the most fair and reasonable outcome is achieved when assets are divided following divorce.

There are three different pension schemes which currently apply to serving and retired members of the military,:

  • AFPS 75
  • AFPS 05
  • AFPS 15

These pensions carry with them different requirements and benefits which are unique to the military setting them apart from the private pensions solicitors frequently come across.

How do the Court deal with Armed Forces Pensions in Finances?

It is difficult to place an accurate value on any sort of pension as most funds will not mature or provide any payments for many years. However, the Court will require a CETV (Cash Equivalent Transfer Value) of your pension before approving any Financial Remedy Order. This is the case irrespective of whether you have agreed a settlement with your ex-partner outside of the Court arena or you are a party to Court proceedings. 

Your CETV can be obtained from your pension provider free of charge once every 12 months. This provides you and your ex-partner with an idea of your pension valuation although it is notoriously the case with military pensions that this figure is misleading as to the true extent of their benefits.

It is vital you understand that your armed forces pension qualifies as a materimonai asset to be considered for division by the Court. You can read our article here for further information on the Court’s approach to finances in general, in the meantime and for ease of reference, the starting point for the division of assets is 50/50. The Court can deviate from this by applying the factors from Section 25 of Matrimonial Causes Act 1973 (i.e. age, length of marriage, standard of living during marriage, health of parties, individual needs of parties etc.). This list of factors is not exhaustive, and each case is determined by the their individual set of circumstances. No two cases are ever the same.

The Court is also obliged to consider whether a Pension Sharing Order would be appropriate in every divorce case.  

When a Pension Sharing Order is considered appropriate, which in recent years for cases including a military pension has become increasingly common, a report would need to be prepared by a Pension Actuary.

It is for this reason that we cannot emphasise enough how important it is that you seek advice early and that you approach the issue of what might happen to your pension with caution and be prepared to arrange for an Actuarial Report to enable us to properly advise you and to ensure the Court is properly informed before any final decisions about orders are made.

In any event, if you and your ex-partner are attempting to resolve matters without the involvement of the Court it would be sensible to instruct an expert to provide you with a Pension Actuary Report to assist with negotiations.

Pension Actuary Report

Pension Actuaries are experts in their field. They carry out specific calculations in order to provide projections/recommendations about what might constitute a fair division of a particular pension.

This is crucial with military pensions in particular, for the reasons listed above and to guard against any error that might impact both you and your ex-partner in the future. After all, you could essentially be required to share anything between 0% – 100% of your pension with your spouse depending on the circumstances of your case and so, accurate assessment is crucial.  

Our family team at ORJ can help you at every stage of this matter whether it be instructing the expert to prepare the report or advising you upon receipt of the report as to your options.

If you wish to discuss your pension or financial situation further, please contact our family law team via email or call 01785 223440.