Glossary · UK
What is Pension Attachment Order?
A divorce court order that earmarks part of an ex-spouse's future pension income or lump sum for the other party, paid only once the pension holder actually draws their pension.
Full Definition
A pension attachment order (sometimes called "earmarking") is a financial order the family court can make on divorce or dissolution, directing that when a pension scheme member eventually starts drawing their pension, part of the income and/or part of any tax-free lump sum must be paid to their former spouse or civil partner instead of, or as well as, to the member. Unlike a pension sharing order, which immediately and permanently transfers a percentage of the pension's value into a separate pension in the receiving spouse's own name at the time of the divorce, an attachment order does not create any separate pension for the receiving party and does not take effect until the member actually chooses to take their pension benefits, which the member -- not the receiving ex-spouse -- controls; if the member delays retirement, so does the payment under the order, and if the member dies before drawing the pension, the attachment order normally lapses and the receiving ex-spouse gets nothing from it. Because of this uncertainty and lack of a clean break, attachment orders became far less common in England and Wales after pension sharing orders were introduced in 2000, though they remain available and are occasionally used, for example where a pension sharing order is impractical or where a couple wants the pension income to be earmarked as a substitute for spousal maintenance. An attachment order also automatically ends if the receiving ex-spouse remarries or (in the case of income attachment) on the death of either party, in the same way ongoing spousal maintenance typically does, and it does not achieve a clean break between the parties, since the financial link between them continues until the member starts drawing benefits and payments actually begin. Where the pension being attached is a defined benefit scheme, such as a final salary pension, valuing and understanding the timing of an attachment order can be complex, and specialist pension-on-divorce advice, often involving a Pension on Divorce Expert (PODE) report, is commonly recommended alongside family law advice.