The value of the pension is “offset” against other assets.

Thus the ex-spouse gets a greater value in other assets in return for the loss of their “share” in pension assets.

It works by valuing the pensions as an immediate asset, then this value is taken into account when the assets and liabilities of each spouse and this pension value is “offset” against other assets such as additional maintenance or income.

If income is being used then it may be possible to use a higher value in the offset calculation to account for tax liabilities in the future.

For DB schemes the CETV is used to obtain a value. The following uis taken into account the amount for the offset:

• The ex-spouse will no longer gain any benefit from the pension or PCLS
• The ex-spouse will no longer get a spouse’s pension if the member predeceases them
• The loss of death in service benefits

For DC schemes the loss to the ex-spouse is determined by agreeing the percentage of the fund value, taking the following into account:

• The loss of pension benefits is calculated in the same way as a pension transfer and it takes into account the possibility of the member’s death pre-retirement
• The loss of spouse’s pension is calculated in a similar way as the pension and mortality tables are used
• The loss of the death in service lump sum would only be paid if the member died before taking benefits and it is not certain that the lump sum would be paid at all, as it is down to the trustee’s discretion which is the same as the DB scheme.