The Teachers’ Pension Plan Delayed My Divorce By Over A Year…And Counting

My wife and I separated in early 2023. We immediately started divorce proceedings. The court finally informed us that it could take place in late 2023. We are both retired.

As we wanted a ‘clean’ divorce we were advised that we needed to get a pension division order, so that we could sort out all finances between us fairly and draw a line under things.

As part of this, we were asked to obtain an equivalent cash transfer value from our respective pension providers.

Although a government-ordered investigation was being conducted at the time, I got mine relatively quickly.

My (ex)wife was a teacher and applied for CETV over a year ago. It took her several weeks before she was able to make contact.

We recognise that there is a legal requirement for public pension providers to provide a CETV assessment within 12 weeks of request.

But the teachers’ pension scheme told her she would have to wait a long time (more than 12 weeks) because of staff shortages. Even if she complained to the ombudsman and he ruled in her favour, the case would not be expedited.

Exasperated, the local MP was contacted and he forwarded his message to the Ministry of Education.

The response basically said that my wife would just have to wait because of these staff shortages. This has been going on for months and months now with no end in sight.

We can’t be the only couple in this situation. How can a public service that has a legal obligation to provide a service to the public:

a) Failure to provide this service, with no apparent return

(b) Not being provided by the Government with the necessary means to comply with the law?

We feel like we are in complete limbo and that there is no way out in sight to allow us to resolve this problem and move on with our lives.

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Steve Webb responds: Sometimes the complexities of the retirement world are just a minor irritation, but in that case, your life is on hold until this issue is resolved.

It is quite shocking that these problems started about 18 months ago and are still not resolved.

Unfortunately, calculating the numbers you need has been impacted by two separate issues, both of which arose while you were 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 calculate contribution rates to public sector schemes.

This has had implications for how these pensions are assessed in divorce proceedings.

As a result, a pause has been put in place in the calculation of the “cash equivalent transfer values” (CETV) you need for an accurate financial settlement.

The government has stated that the suspension of CETV calculations has been lifted at the end of April 2023 and appropriate guidance has been issued to schemes, but this has undoubtedly created a backlog.

Unfortunately, an additional complication arises from the so-called “McCloud” ruling, which has wreaked havoc on the administration of public sector pension plans.

The McCloud decision concerns major changes to public service pension schemes that were due to come into effect in 2015 but were found to be unfair on grounds of age discrimination.

The “McCloud solution” means that millions of public sector workers will now have a choice when they reach retirement age as to whether they want their benefits to be accrued under the “old” or “new” public sector pension rules for the period 2015 to 2022.

The rules implementing these changes came into force on 1 October 2023 – a bad time from your perspective – but this makes calculating the ‘value’ of the pension for CETV purposes even more complex than usual in some cases.

You can read a more detailed technical explanation of the impact of the changes and the type of cases that could be affected here: Changes to Public Sector Pension Scheme (McCloud) benefits from 1 October 2023 – pension implications in the event of a divorce settlement.

Unfortunately, schemes needed further guidance on how to calculate the value of pensions under these new rules and also needed to agree a common approach with other public sector schemes, which caused further delays.

As for the legal deadline for providing a CETV, this should normally be three months, but the law allows schemes to take up to six months if they are affected by “reasons beyond their control”.

But it seems we have passed that deadline as well.

The latest update “CETV and PSO Processing Delays” on the Teachers’ Pension Plan website – posted three months ago – explains where things stand and simply says:

“We are working through the cases and writing to members to provide figures where we can. We will provide a further update on estimated timelines for the remaining cases in the coming weeks, once the outstanding guidance is finalised.”

One problem is that developing these numbers is a highly specialized task, and programs cannot simply “put more people in the same job” unless they are highly qualified.

They must also ensure that people are treated consistently and fairly across the different public sector schemes involved.

I wish I could offer you a simple solution, but unfortunately I can’t.

The best thing I can suggest is to go back to your local MP (who may have changed since last time) and ask them to write again to the Teachers’ Pension Scheme and the Department for Education to highlight the impact of the delays and urge them to speed up the process of reaching consensus on how to proceed.

The more people contact MPs, the more pressure will be put on the government and the programme to make this issue a priority and resolve it once and for all for you and everyone affected.

The Ministry of Education was contacted but did not provide comment for publication.