More teachers have told the BBC they have experienced emotional and financial strain after enduring long waits to finalise their divorces, following delays in pension valuations. The Teachers’ Pensions Scheme has apologised for the pension scheme valuation delays, and the Department of Education (DfE) has said it expected the backlog to be mostly cleared by February 2025.
As reported by the BBC, a total of 1,344 teachers were waiting for valuations from the Teachers’ Pensions Scheme (TPS) on 6 January 2025. This is a sizeable decrease from a figure of just under 2,000 provided in December, reported via a Freedom of Information request.
These pension valuations are known as ‘cash equivalent transfer valuations’ (CETVs), which are a vital requirement in determining whether pensions should be shared by a divorcing couple. Without these CETVs, it can be almost impossible to reach a financial settlement, as the couple involved will not have any idea about the value of their pensions.
Typically, the CETV is only the first step in understanding the true value of a pension. This is especially so in respect of ‘defined benefit’ pension schemes which are based on salary and length of service with a particular employer. Defined benefit schemes (of which the Teachers’ Pensions scheme is one) are commonplace throughout the public sector.
How long should a CETV Request take?
Under the relevant rules (Regulation 2(5)(b) of the Pensions on Divorce etc. (Provision of Information) Regulations 2000), if a CETV request is made in connection with divorce, it should be provided within six weeks, rather than the standard three-month timeframe which would apply otherwise. Despite the regulations, many teachers have faced much longer waits, and a potential group action is being considered.
What caused the delays?
The Department for Education said staffing levels were not the cause of delays and that it was processing cases in date order where possible
In an update on its website, Teachers’ Pensions has stated that the backlog was caused by two issues. Firstly, that an embargo on CETVs was necessary for all public service pension schemes from March 2023 to July 2023. Secondly, before those CETVs could be processed, transitional legislation took effect on 1 October 2023. Members affected by that legislation now need two calculations to account for service during the remedy period in either the legacy or reformed scheme. This change applied to all affected public service pension schemes.
It has also claimed that ‘the majority of delayed CETVs are forecast to be completed by February 2025.’ The reasons for the delays given by Teachers’ Pensions do not include any reference to the forthcoming change to the company responsible for administering the Teachers’ Pensions scheme. For a long time (c. 27 years) this was Capita plc, however the Indian IT firm, Tata, will be taking over the contract from October 2025.
I am / my partner is a member of the Teachers’ Pensions scheme – what can we do?
Early planning helps.
As soon as you know you are going to take the difficult step of starting divorce proceedings – apply for your CETV and ensure your request confirms that you are doing so in the context of divorce.
Divorces take a minimum of seven to nine months, so requesting pension information early is the best way to avoid delays.
In light of the sharp reduction (c. 32%) in outstanding CETVs from December to early January, along with Teachers’ Pensions own statement that ‘the majority of delayed CETVs are forecast to be completed by February 2025’, it would appear that progress is now being made.
Ultimately, there is no substitute for obtaining full and detailed pension information and the instruction of an appropriately qualified, experienced pensions on divorce expert (PODE). Despite pensions sharing legislation now having been in place for close to a quarter of a century, it is still a frequently neglected area.
Pensions are often one of, if not the most valuable assets in a divorce, and so if they are neglected or not dealt with properly, a person’s financial future can be significantly worse than it would have been otherwise.
It is also possible in certain circumstances to finalise all other non-pensions matters and financial claims in the divorce so that there are essentially two final orders in respect of financial matters: one regarding everything else and one regarding pension sharing. Where all other matters are finalised and the only outstanding matter is for pensions to be shared in accordance with a PODE report, then this can be an option in order to bring as much finality as possible whilst the CETV is awaited.
In certain situations, the PODE may also be able to suggest other options that can be implemented in respect of pension sharing.
Finances on divorce experts
If you’re facing decisions about divorce or need guidance on any aspect of family law, our experienced team at Slater Heelis is here to support you. Get in touch with our expert team by completing our online contact form or call us on 0330 111 3131.