In the complex landscape of divorce proceedings, financial settlements have always been a contentious issue. Now, it’s become an even more significant concern for public sector employees, particularly teachers and NHS staff, as they face unprecedented delays due to the Treasury’s ongoing recalculation of public sector pensions. We, at Easy Online Divorce, have been featured in a BBC News article discussing this impactful situation.
The Treasury announced this recalculation in March, which has led to the suspension of the calculation of pension “cash equivalent transfer value” (CETV), a critical factor in determining the financial settlements in divorce cases. The knock-on effects are considerable, particularly for those hoping to move forward with their lives post-divorce. Current and retired public sector staff are affected, with many expressing distress and anxiety due to the unforeseen changes and the resulting uncertainty.
In the middle of this turmoil, one figure particularly stands out: Louise Harris, a 41-year-old former teacher from Kesgrave, Ipswich. Her personal story articulates the human cost of these delays – the negative impact on her children’s living conditions and her own mental health. It’s a potent reminder of the personal hardships that bureaucratic changes can cause.
As the founder of Easy Online Divorce, I’ve been witnessing this chaos first-hand. As the BBC News article reports, we have seen a spike in calls from affected parties who are unable to provide their pension figures due to the embargo, leading to unnecessary stress and uncertainty.
Pensions and Divorce
It’s important to remember that for most divorcing couples, pensions are the most significant asset after their home. The delay in financial settlements due to the pension recalculation has become a massive hurdle for thousands of individuals hoping to move on from a challenging chapter of their lives.
This issue isn’t just for teachers and NHS workers – police officers, firefighters, and armed forces personnel may be next in line, broadening the scope of those affected. That’s why it’s crucial for us to raise awareness and help those impacted navigate these troubled waters.
Please take a moment to read the full BBC News article here
Update 25/05/23
Yesterday, I received a letter from RT Hon John Glen, Chief Secretary of the Treasury. He said that following a consultation on the 30th March 2023, ‘the previous guidance… for calculating cash equivalent transfer values payable by public service pensions schemes was suspended.’
‘Subsequently, on 27 April 2023, HM Treasury published new guidance for setting discount rates for calculating transfer values.’
‘It is now necessary for the Government Actuary’s Department (GAD) to calculate new actuarial factors to be used in the calculation of transfer values, including those for divorce. GAD expects to provide these factors to administrators of public service pension schemes by the end of May.’
‘Schemes will then be able to carry out the calculations for transfer values.’
Glen went on to say, ‘The Government recognises the impact this temporary suspension of the guidance and the requirement to calculate new actuarial factors has had… and would like to apologise for the inconvenience caused.’
When should you expect to get your public sector pension valuation?
If GAD has completed the work on the factors by the end of the month, this should trickle through to the individual pension providers operated on behalf of the NHS, Teachers, Police etc.
It often takes the public sector several weeks and often months to provide pension valuations. The temporary suspension is likely to have created a backlog, so your best option is to start asking for your pension valuation now, as they will deal with applications in the date order they received them.
Stay tuned to our blog for more updates on this ongoing issue. At Easy Online Divorce, we’re committed to providing you with the information and support you need during these challenging times. You can email, call or schedule a free consultation here.
James Brien, Founder of Easy Online Divorce