The Teachers' Pension Scheme has delayed my divorce for a over a year... and counting
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My wife and I separated in early 2023. We started going through the divorce process immediately. We were finally advised by the court that this could happen at the end of 2023. We are both retired.
As we wanted a 'clean break' divorce we were advised that we would need to get a Pension Sharing Order, so that we could get all finances sorted out between us fairly and draw a line under things.
As part of this we were told to get a cash equivalent transfer value from our respective pension providers.
Although there was a Government-ordered review being conducted at the time, I obtained mine comparatively quickly .
Pension calculation: The Department of Education said my wife would have to wait for a Cash Equivalent Transfer Value due to staff shortages - and we can't finalise our divorce without it
My (ex)-wife was a teacher and applied for a CETV over a year ago. It took many weeks for her to even be able to make contact.
We are aware that there is a statutory duty for public pension providers to give a CETV valuation within 12 weeks of the request being made.
But the Teachers' Pension Scheme told her that she faced a long wait (well over 12 weeks) due to staff shortages. It said even if she complained to the Ombudsman and it found in her favour, it would not expedite matters.
In exasperation the local MP was contacted and he forwarded her message on to the Department of Education.
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The reply basically said my wife would just have to wait due to these staff shortages. This has now been dragging on for months and months with no end in sight.
We cannot be the only couple in this situation. How can a Government-run department that is under a statutory duty to provide a service to the public:
a) Not provide that service, with no apparent comeback
b) Not be provided by the Government with the wherewithal to comply with the law?
We feel like we are completely in limbo and that there is no end in sight to us being able to resolve this matter and to move on with our lives.
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Steve Webb replies: Sometimes the complexities of the pensions world are just a minor irritation, but in this case your life is on hold until this matter is resolved.
It is quite shocking that these problems started around 18 months ago and are still not finally resolved.
Unfortunately, the calculation of the figures that you need has been impacted by two separate issues, both of which have arisen while you have been going through the divorce process.
The first is that in March 2023 the Government announced that it was changing what are called the 'discount rates' used to work out contribution rates into public sector schemes.
This had a knock-on effect on the way in which such pensions are valued for purposes of a divorce case.
As a result, a pause was put in place on the calculation of so-called 'cash equivalent transfer values' (CETVs) which you need for an accurate financial settlement.
The Government said that the suspension in calculation of CETVs was lifted at the end of April 2023 and appropriate guidance was issued to schemes, but this undoubtedly created a backlog.
Unfortunately, a further complication arises from the so-called 'McCloud' judgment which has caused chaos in the administration of public sector pension schemes.
The McCloud judgment relates to big changes to public service pension schemes which were due to come into effect in 2015 but which were ruled to be unfair on grounds of age discrimination.
The 'McCloud remedy' means millions of public sector workers will now have a choice at pension age as to whether they want their benefits to build up under the 'old' or 'new' public sector pension rules for the period from 2015 to 2022.
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Rules to implement these changes came into force from 1 October 2023 – a bad time from your point of view – but this makes working out the 'value' of the pension for CETV purposes even more complex than normal in some cases.
You can read a more detailed technical explanation of the impact of the changes and the type of case which might be affected here: Public sector pensions remedy (McCloud) changes to benefits from 1 October 2023 – implications for Pensions on Divorce settlement.
Unfortunately, the schemes needed further guidance as to how to work out pension values under these new rules and also needed to agree a common approach with other public sector schemes, which has led to further delays.
In terms of the legal deadline for providing a CETV, this should normally be within three months, but the law does allow schemes to take up to six months if they are affected by 'reasons beyond their control'.
But it sounds as though we are also past that deadline.
The latest update 'Delays in processing CETVs and PSOs' on the website of the Teachers' Pension Scheme – posted three months ago – explains where things are up to and simply says:
'We're working through the cases and writing to members with the figures where we can. We'll provide a further update on estimated timescales for the remaining cases in the coming weeks as the outstanding guidance is completed.'
One of the problems is that working out these figures is a highly specialist role and the schemes cannot simply 'put more people on the job' unless they are highly trained.
They also need to make sure that people are being treated consistently and fairly across the different public sector schemes affected.
I would love to be able to offer you an easy resolution but unfortunately I cannot.
The best thing that I can suggest is that you go back to your local MP (who may have changed since last time) and ask them to write again to both to the Teachers' Pension Scheme and the Department for Education highlighting the impact the delays are having and urging them to speed up the process of agreeing a way to proceed.
The more people who contact MPs, the more pressure will be put on the Government and the scheme to make this issue a priority and get it finally resolved for you and for all those who are affected.
The Department for Education was approached but did not provide a comment for publication.
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