Failure to Implement Pension Sharing Order
May 2025
A Pension Sharing Order is a key part of many financial settlements on divorce, ensuring that pensions are fairly divided between spouses. Once the court has approved the order, the obligation then shifts to the pension holding party to provide the relevant information to their pension provider, and then finally to the pension provider itself to effect the transfer. Delays or failures in implementation can cause significant financial and legal issues, depending on the length of the delay, and the further steps needed to rectify matters.
This summary provides general information and does not constitute legal advice on any individual circumstances.
After the court issues a Pension Sharing Order, and the relevant information has been provided, the pension provider is responsible for implementing it. This involves dividing the pension in line with the percentage set out in the order and creating a separate pension pot for the receiving party, or a credit to an existing pot, as ordered. The process is time-sensitive and must be completed within four months of the date the pension provider receives all the necessary documents and the final order in the divorce or dissolution.
The party responsible for the pension (the scheme member or their solicitor) must send the order and related paperwork to the pension provider, along with any fees required. Only once all the formalities are completed can the order be implemented.
What Happens If the Order Is Not Implemented On Time?
Failure to implement a Pension Sharing Order within the requisite four months can lead to additional legal and financial problems. Delays can often be managed by applying for an extension to the implementation deadline (provided the relevant criteria are met), but this should be approached proactively.
There are several common issues that may impact the implementation of a Pension Sharing Order, including the pension holder or their solicitor failing to notify the pension provider, delays in submitting the required documents, or confusion over who is responsible for actioning the order. Administrative errors by the pension provider or misunderstandings about the timeline can also contribute to unnecessary delays. Whatever the reason, if it becomes clear that the implementation will not take place before the four-month deadline, it is important that an extension application is made in good time to avoid an unintentional breach of the Order.
If there has been a delay, the party receiving the pension transfer should also consider whether the pension should be re-valued, or if some form of interest should be paid, to ensure that they do not suffer a financial loss.
Enforcing a Pension Sharing Order
If a Pension Sharing Order is not implemented, legal action may become necessary to enforce it. In such cases, the receiving party can apply to the court to compel the other party to comply with the terms of the original financial order. The court has the power to make further directions, including instructing the pension provider directly to implement the order, provided that all required documentation, such as a final sealed order and any supporting forms, have been correctly submitted.
It is important to act without delay, as implementation is not automatic and can easily be missed, particularly during the final stages of the divorce or dissolution, when focus may shift to other issues. Timely follow-up is crucial to protect the financial stability of the receiving party and to avoid further legal complications down the line.
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