Glossary · UK
What is Pension Sharing Order?
A court order on divorce allocating a percentage of one spouse's pension rights to the other, implemented as a pension debit/credit transfer.
Full Definition
A Pension Sharing Order (PSO) is a court order made on divorce or dissolution of a civil partnership that splits pension rights between the parties. The transferring party receives a pension debit reducing their fund by the specified percentage; the receiving party receives a pension credit. The transfer is tax-free (no income tax or CGT at the point of transfer). For defined contribution pensions the credit is transferred to a suitable pension arrangement for the recipient. For defined benefit (final salary) pensions the recipient may be admitted to the scheme as a deferred member or take a Cash Equivalent Transfer Value (CETV) to an external pension. The recipient pays income tax when they eventually draw the pension. A PSO cannot be made against the Basic State Pension or New State Pension.