Reforms should ease the pain of separation

pensions

Divorce is on the increase and advisers need to be aware of the impact on pension benefits

There are three options to consider when looking at a pension as part of the assets of a marriage: offsetting, earmarking and pension sharing. The first and, arguably, preferred option is offsetting, where one asset is offset against another - for example: "I'll keep the pension, you keep the house." This ensures a clean break. Earmarking was introduced by the Pensions Act 1995 and permits a percentage of benefits to be paid to the ex-spouse when the member's pension comes to payment. However, there are some major disadvantages to earmarking orders. If the ex-spouse remarries or dies, t...