You’ve secured the Pension Sharing Order: Here’s what needs to happen next

Many solicitors feel unsure about how to implement a Pension Sharing Order (PSO) following divorce.

The process can be administratively complex, and there are strict procedural requirements. Not to mention the potential challenges of coordinating between clients, courts, and pension providers.

However, changing a PSO after it has been issued is difficult, so it’s crucial to get the implementation right.

That’s why I’ve created this jargon-free guide explaining what needs to happen after you’ve secured a PSO for your clients.

How to implement a Pension Sharing Order in 3 simple steps

1. Prepare and send the Pension Sharing Order for court approval

When your client and their ex-spouse reach a financial settlement, you’ll need to draw up the PSO, which consists of a Consent Order and a Pension Sharing Annex (Form P1).

You’ll then need to send the Consent Order to the family court, where it will be sealed to make it legally binding. The sealed order authorises the pension scheme administrator to implement the PSO.

When drafting the P1, you must ensure that it:

• Identifies the pension scheme correctly– Ensure that you provide the full scheme name and address of the provider. Remember to include the policy or reference number, if this is required.
• Lists the pension member’s full information – You’ll need to include their full name, date of birth, National Insurance number, and the name of the PSO recipient.
• Clearly state how the implementation fee will be paid – Clarify whether this will be paid from the pension scheme or directly by your client.

• States the percentage to be transferred – In England, Wales, and Northern Ireland, the amount should be expressed as a percentage. However, in Scotland, the share may be given as either a percentage or a fixed monetary amount.

It’s a good idea to send the draft Annex to the pension provider before it goes to court so that you can correct any errors early in the process and avoid delays.

The PSO becomes legally effective on “transfer day”, which is normally 28 days after the sealed order (to allow for appeals) and only once the Final Order or Decree Absolute exists, whichever is later. Despite the name, this is not when pension credits are transferred.

The scheme must implement within four months of the later of:

• Transfer day
• Receipt of all required documents and any fee.

2. Send the Pension Sharing Order to the pension scheme administrator

Next, send the sealed Consent Order and Pension Sharing Annex to the pension scheme administrator.

Check that you’ve included:

• A covering letter– This should confirm the court has approved the order.
• The implementation fee– There may be no fee, but if there is, the amount varies depending on the pension scheme. It typically ranges from £250 to £3,000 plus VAT. Check the scheme’s fee schedule for details. Ensure that it is clear whether this will be paid from the pension scheme or directly by your client.
• Confirm how the implementation fee will be paid – It can either be paid directly by your client or taken from the pension before it is transferred. While the latter reduces the value of the pension, it might be a useful option if the client prefers not to pay the fee upfront.
• Any completed forms the scheme has provided – If the scheme offers a choice between an internal or external transfer, it’s worth recommending that your client seek financial advice to help them understand which option is most beneficial for them.

The four-month implementation period only begins once the pension scheme has received:

• The sealed PSO and Pension Sharing Annex
• Implementation fee (if applicable)
• All completed internal paperwork from both parties
• Details of the receiving pension scheme (for external transfers).

The scheme administration will choose a “valuation day” during implementation, when it will recalculate the value of the pension used to discharge the credit. This determines the exact amount that each party will receive. The split applies to benefits as of the day before transfer day. The pension benefits must then be transferred before the end of the implementation period.

3. Ensure your clients understand how their pension credits will be transferred

How your clients receive their pension credits will depend on the type of transfer that has been selected.

Internal transfer – The pension credit remains in the same scheme but is moved into a separate account in your client’s name. This is commonly used in public sector or defined benefit (DB) schemes.

External transfer – The pension credit is transferred to a pension scheme chosen by your client. Be sure to check that:

• Your client has opened a receiving scheme before the PSO is sent to the pension provider
• Full provider details are passed promptly to the ceding scheme.

The pension sharing process is completed when both parties have received written confirmation from the pension scheme, including the:

• Final pension credit and/or debit amounts
• Implementation date.

Key timings you and your clients need to be aware of

It’s crucial that you and your client work together to keep the implementation process moving forwards as efficiently as possible.

While timings may vary, here’s a helpful guide of what to expect:

• Court approval to scheme notification – Ideally, less than two weeks.
• Scheme acknowledgement – Usually two to four weeks.
• Implementation completion – Within four months of the scheme receiving all required documents and fees.

If implementation is not completed within four months, this could lead to legal and financial problems.

In some circumstances, the scheme’s trustees may be granted an extension by The Pensions Regulator. If this occurs, and your client was expecting to receive a pension transfer, they may need to consider whether the pension should be revalued or if some interest should be paid.

4 simple ways to avoid delays

As you can see, adhering to the implementation time frame is crucial. While there could be some sources of delay that lie beyond your control – such as those caused by a DB scheme winding up – you could reduce the risk of delays by:

1. Ensuring that all paperwork is complete and error-free before sending
2. Confirming implementation fee arrangements with the client in advance
3. Advising the recipient to set up a receiving pension plan as early as possible
4. Checking that documentation is sent to the correct pension scheme administrator.

A financial expert can help you keep things moving smoothly and efficiently

Implementing a PSO can be complicated for both you and your client. A financial expert can help by:

• Reviewing CETVs and scheme benefits before the order is finalised
• Checking the Pension Sharing Annex for accuracy to avoid it being rejected by the scheme administrator
• Explaining the pros and cons of internal and external transfers for the client’s needs
• Arranging a suitable receiving pension for external transfers
• Ensuring that your client’s pension credit is invested appropriately and tax-efficiently

• Coordinating with you and pension administrators to keep the process on track.

I can also help your clients after implementation by advising them on next steps, reviewing their retirement plans, updating estate planning documents, and providing ongoing financial reviews.

Get in touch

If you’d like to know more about how I can support you and your clients during and after the PSO implementation process, I’d love to hear from you.

To find out more, please get in touch by email at lottie@truefinancialdesign.co.uk or call 03300 889138.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Approved by 2plan wealth management Ltd 23/09/25.