If you, or your spouse, has an Armed Forces Pension that has accrued during the length of your marriage – this will be a valuable asset to be considered during Divorce Proceedings. An Armed Forces Pension is one of the most generous pension schemes available in the UK and there are numerous benefits of the scheme. 

Generally the benefits of the Armed Forces Pension can only be received after 2 full years of service known as a “vesting period” or “period of qualifying service”. However, the benefits begin to be accrued from the first day of service. 

Scheme members do not need to pay into the scheme. The scheme is paid for entirely from the public purse and at a generous rate. 

This means that on divorce, the Armed Forces pension may be one of the most valuable assets that the couple have. The result is often that a Pension Sharing Order will be required to equalise the pension provisions for both parties in the future, to enable both to be comfortable in retirement. 

It is always recommended to obtain an expert actuary report when dealing with an Armed Forces Pension because the value of the pension may be more than it appears at first sight. 

Usually in divorce proceedings, your solicitor will request a Cash Equivalent Value (CEV) of the pension fund. 

However, the nuances and complexities of the Armed Forces Scheme mean that the CEV could be misleading. For example, the ‘cash equivalent’ in the Armed Forces Pension at today’s date, may not take into account any Early Departure Payments, Lump Sums and/or Bonuses that the pension holder may be entitled to receive in the future. The value of the pension can increase dramatically when these factors are taken into account and this can alter any offers for Financial Settlement that are made.  

Therefore obtaining expert pension advice is key so that both parties know the true value of the pension, and how the value can be optimised. 

After the value of the pension has been identified, the Court has a variety of powers to divide the pension. A potential outcome is that the spouse who is not an AFPS member will join the Pension Scheme in their own right and be transferred a percentage of their spouse’s benefits. Each party will then receive payments from the scheme in the future. 

Our lawyers have offices based in Wolverhampton and Cradley Heath and provide assistance to clients across the West Midlands including: Stourbridge, Kidderminster, Birmingham, Dudley and Walsall.

If you would like any further information or advice in relation to Armed Forces Pensions on divorce, please contact our specialist family lawyers: Mark Vandaele on 01902 796930 (mvandaele@georgegreen.co.uk) at our Wolverhampton office or Rachel Baker on 01384 340 580 (rbaker@georgegreen.co.uk) at our Cradley Heath office.