In any divorce proceedings dealing with the division of matrimonial assets, the parties are required to disclose to each other and to the Court, all their financial interests. This will include details relating to pension rights that are shareable regardless of whether a pension sharing order will eventually be made.

The calculations set out in this guidance determine:

• the value of pension rights for a member of benefits in the 2015 scheme, as required for the divorce proceedings.
• the pension credit to be awarded to an ex-partner after a member's pension, in the 2015 scheme, is subjected to a pension sharing order.
• the pension debit to be applied to a member's pension in the 2015 scheme, after it is subjected to a pension sharing order.

The calculations required and the factor tables used depend on the status of the member at the calculation date, including their age, sex, normal pension age and the date on which they will reach (or did reach) State Pension age.

If the other party in the divorce proceedings also has 2015 scheme benefits, or either party has 1992 scheme or NFPS benefits, then separate valuations are required in respect of those pension rights.

For divorce cases in Scotland, the cash equivalent calculated in accordance with this guidance is then adjusted in accordance with the Divorce etc (Pensions) (Scotland) Regulations 2000, subject to any relevant case law.

The calculation date will depend on the stage of the divorce:

• If a quotation is required for part of the proceedings, in Scottish cases, the calculation date will usually be specified by the Court. For divorces in England, Wales and Northern Ireland, the calculation date used should be consistent with the date used for normal transfer value calculations (i.e. the guarantee date).
• If the calculation is being done after a pension sharing order has been made, the calculation date should be the day on which the relevant order or provision takes effect. This is often referred to as the transfer day, as defined in the Welfare Reform and Pensions Act 1999 (the 1999 Act). The 1999 Act applies in England, Wales and Scotland. The corresponding legislation in Northern Ireland is the Welfare Reform and Pensions (Northern Ireland) Order 1999.

Factors should be selected with reference to the member's status and age last birthday at the calculation date, which should be determined in line with the section above.

For calculations being completed after a pension sharing order has been made, there may be some time between the calculation date (which should be the day on which the relevant order or provision takes effect) and the date on which administrators process the calculation (sometimes referred to as the valuation day, as defined in the 1999 Act). In some cases, it's possible that different sets of factors will be in force on the two dates. In these circumstances, the set of factors that are in force on the day administrators process the calculation should be used. Individual factors should be selected from this factor set with reference to the member's or ex-partner's status and age last birthday at the calculation date, in the normal way.

Details of the benefits to be included in the calculation of cash equivalents for divorce purposes are set out in the Pensioners: Benefits to use when calculating pensioner cash equivalent values section, for current pensioners, and in the latest version of our relevant CETV guidance note, for active and deferred members.

It is important that the amount of all relevant benefits used in the calculation should be the amount taken immediately before the calculation date, consistent with the 1999 Act.

The calculation for an active or deferred member will depend upon whether or not the member could have retired without actuarial reduction or employer consent on the calculation date.

If the member could not have voluntarily retired with immediate payment of unreduced benefits on the calculation date then the benefits should be valued in accordance with the current CETV guidance, based on the member's status, age and benefits at the calculation date. This is the case even if the member would not normally be entitled to a transfer value. Please see the latest version of our relevant CETV guidance for the calculation formulae to use.

If the member could have voluntarily retired on the calculation date with immediate payment of unreduced benefits (i.e. with no actuarial reduction), then:

• For both active and deferred members, the divorce cash equivalent (CE) is calculated as if that the member had retired on the day immediately before the calculation date and was therefore in receipt of retirement benefits from the calculation date. It should be assumed that no pension is commuted for a lump sum.
• The member is therefore treated as if they were a pensioner member and the divorce CE should be calculated using the formula for a pensioner cash equivalent set out in the Pensioners section. The actual future date of the member's (planned) retirement in practice is of no relevance to this calculation.
• The calculation is based on the member's age, assumed status and benefits at the calculation date as determined above.
• Benefits not yet in payment should be increased up to the calculation date in line with the current guidance.

In both circumstances the calculation date should be selected as above.

Pension debit members

Where a member has one or more pension debits (either in respect of a previous divorce or one or more annual allowance tax charges), the cash equivalent should be calculated in two stages.

1. The gross cash equivalent should be calculated ignoring all pension debits.
2. The value of each pension debit (revalued to the calculation date) should be calculated as the cash equivalent of a deferred pension of the same amount as the debit.

The final cash equivalent to be used for divorce purposes is the gross cash equivalent calculated in stage one, less the value of all pension debits calculated in stage two.

There are two sets of tables:

• Tables A1 and A2: Pensioners who retired on ordinary grounds;
• Tables B1 and B2: Pensioners who retired on ill-health grounds.

In a calculation for an ill health pensioner under the age of 55, Tables B1 and B2 should only be used where full pension increases are payable in the period up to age 55. If, for any reason, pension increases are not payable to an ill health pensioner before age 55 then the case should be referred to the Welsh Government.

The divorce CE should be calculated using the formula for a pensioner cash equivalent set out below:

Cash Equivalent = (P x F_x^P) + (SUR x F_x^S) - (G^pre + 0.15 x G^post) x F_x^GMP

where:

P is the member's current annual pension at the calculation date

SUR is the surviving partner's annual pension payable if the member died on the calculation date

G^pre is the annual pre-88 GMP, including revaluation to the calculation date (for members who reached SPA before 6 April 2016) or zero (for members who reached SPA on or after 6 April 2016)

G^post is the annual post-88 GMP, including revaluation to the calculation date (for members who reached SPA before 6 April 2016) or zero (for members who reached SPA on or after 6 April 2016)

F_x^P is the member's pension factor for a member aged x last birthday at the relevant date, taken from Tables A or B

F_x^S is the surviving partner's pension factor for a member aged x last birthday at the relevant date, taken from Tables A or B

F_x^GMP is the GMP onset/offset factor for a member aged x last birthday at the relevant date, taken from Tables A or B

Benefits to use when calculating pensioner cash equivalent values

Pension benefits:

• The member's pension should be their annual pension in payment on the calculation date and the survivor's pension should be the annual contingent survivor's pension that would be payable if the pensioner died on the calculation date (for this purpose, it should be assumed that an eligible survivor exists). The pension increases included should be those awarded up to and including the April increase immediately before the calculation date.

Guaranteed Minimum Pension (GMP):

• As set out in Adjustments for Guaranteed Minimum Pension, adjustments for GMP should only be made for members who reached State Pension age before 6 April 2016 and who have a GMP in this scheme. Under the 2015 Scheme Regulations, GMP can only arise where a previous transfer in has been received.
• For members who meet these criteria, the cash equivalent must be adjusted to reflect increases on the GMP that are the responsibility of the State. Separate pre and post 1988 GMP figures need to be used, and these should be the current annual amounts of GMP in payment. If the member has passed GMP Payment Age, and their GMP is not yet in payment, then the case should be referred to GAD.