What is a Pension Adjustment Order?

For many people, their pension fund could possibly be a very valuable financial asset, after the family home. In the event of a relationship breakup, it may be necessary to split the pension fund between the member and their spouse, civil partner, or cohabitant, as the case may be.  A pension fund can only be legally split by a Pension Adjustment Order, or PAO for short, made by the Courts as part of the relationship breakup.  It cannot be split in any other way.  A PAO does not apply in the case of separation agreements which do not involve a court.

The Family Law Acts require pension benefits to be taken into account in arriving at a financial settlement in the case of a judicial separation or divorce.  Allowance can be made in one of two ways:

• By a Pension Adjustment Order (PAO); or
• By making orders in relation to some other family assets e.g., family home, savings etc., which the Court consider provides a fair distribution of the total overall assets of the couple.

When is a Pension Adjustment Order drafted?

A PAO can be made by the courts following:

• A decree of dissolution of a registered civil partnership;
•  The ending of a period of cohabitation between a couple who are neither married or in a registered civil partnership with each other;
•  A decree of divorce; or
•  A decree of judicial separation.

A Pension Adjustment Order (PAO) is an order served on the Trustees of the Pension Scheme and is binding on them.  A PAO can be made with regard to either:

• Retirement benefits; and / or
• Contingent benefits i.e., the Scheme member’s death in service benefits.

An order in relation to retirement benefits may be made at the same time as the granting of the decree of judicial separation or divorce or at any time thereafter during the lifetime of the member spouse / civil partner (including after the payment of pension has begun).  It should be noted that if the scheme member leaves service, the PAO over his / her retirement fund does not lapse i.e., it continues to apply to the preserved benefit which will be slplit when the deferred member eventually takes his / her fund.

An order in relation to contingent benefits (i.e., member’s death in service benefits) must be made within 12 months of the granting of the decree of judicial separation or divorce.  This benefit only becomes payable if the individual dies while an employee member of the Scheme, which may or may not happen.  Accordingly, if the scheme member leaves service, then the PAO over the death in service benefits lapses as the death in service benefits end on termination of service.

It is important the member seeks independent legal advice in respect of this matter.  Further information about Pension Adjustment Orders can be obtained from the Pensions Authority’s website www.pensionsauthority.ie

If a Member has a PAO, who should they send it to?

The PAO must be served on the Trustees of the Pension Scheme. 

To assist a member's solicitor in drafting a PAO, the following information will be useful to provide to them:

Pension Scheme Name:

• National Federation of Voluntary Service Providers Pension & Life Assurance Scheme

Pension Trustees:

• John McHugo, Chairman
• Pauline Brennan
• Francis Coughlan
• Deirdre Herlihy
• James Skehan, Professional Trustee & Vice Chairman

Trustees Postal Address:

• Pension Scheme Trustees, c/o Maria McMahon, Pension Scheme Manager, National Federation of Voluntary Service Providers Pension & Life Assurance Scheme, Oranmore Business Park, Oranmore, Galway H91 TP2W

Scheme Reference Numbers:

• Pension Authority Number: PB67866
• The member will also need to provide their Scheme Number and Member Number, both of which can be found on either:
  • the member's annual Pension Benefit Statement
  • on the member's online member portal, if the member is registered for this service. If the member is not registered for the member portal, please watch the member portal video for information on how to register. 
• Group Life Scheme currently underwritten by Aviva 731161