The Teachers’ Pension Plan has delayed my divorce for over a year…and counting

My wife and I separated in early 2023. We started the divorce process immediately. We were eventually informed by the court that this could happen in late 2023. We are both retired.

As we wanted a ‘clean’ divorce, we were told we would need to get a pension sharing order, so we could sort out all the finances between us fairly and put an end to things.

As part of this, we were told we had to obtain a cash equivalent transfer value from our respective pension providers.

Although a government-ordered review was underway at the time, I got mine comparatively quickly.

My (ex) wife was a teacher and applied for a CETV over a year ago. It took her many weeks to get in touch with me.

We are aware that public pension providers have a legal obligation to provide a CETV assessment within 12 weeks of the application being submitted.

But the Teachers’ Pension Scheme told her she would face a long wait (more than 12 weeks) because of staff shortages. She was told that even if she complained to the Ombudsman and the Ombudsman ruled in her favour, that would not speed up the process.

Exasperated, they contacted the local MP and he forwarded their message to the Department of Education.

The reply basically said that my wife would have to wait due to staff shortages. This has been going on for months and months with no end in sight.

We cannot be the only couple in this situation. How can a government department that has a legal obligation to provide a service to the public:

a) Not providing said service, with no apparent return

b) The Government does not have the necessary means to comply with the law?

We feel like we are in total limbo and there is no end in sight to resolve this matter and move on with our lives.

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Steve Webb answers: Sometimes the complexities of the pension world are just a minor irritation, but in this case your life is on hold until this matter is resolved.

It is quite shocking that these problems started about 18 months ago and have still not been definitively resolved.

Unfortunately, your calculation of the figures you need has been affected by two separate issues, both of which arose while you were going through the divorce process.

The first is that in March 2023 the Government announced that it was going to change the so-called “discount rates” used to calculate contribution rates in public sector plans.

This had a knock-on effect on the way such pensions are valued for the purposes of a divorce case.

As a result, the calculation of so-called “cash equivalent transfer values” (CETV), which are necessary for accurate financial settlement, was paused.

The Government said the suspension on the calculation of CETVs was lifted at the end of April 2023 and appropriate guidelines for the schemes were issued, but this undoubtedly created a backlog.

Unfortunately, the so-called “McCloud” ruling has created a further complication that has caused chaos in the administration of public sector pension systems.

The McCloud ruling concerns major changes to public service pension schemes that were due to come into force in 2015 but were deemed unfair on grounds of age discrimination.

The “McCloud solution” means that millions of public sector workers will now have the option, when they reach retirement age, to choose whether they want their benefits to accrue under the “old” or “new” public sector pension rules for the period 2015 to 2022.

The rules to implement these changes came into force on 1 October 2023 (bad timing from their point of view), but this makes calculating the “value” of the pension for CETV purposes even more complex than usual in some cases.

You can read a more detailed technical explanation of the impact of the changes and the type of case that might be affected here: Changes to benefits under the Public Sector Pension Settlement (McCloud) from 1 October 2023: implications for pension settlements in the event of divorce.

Unfortunately, schemes needed further guidance on how to calculate pension values ​​under these new rules and also needed to agree a common approach with other public sector schemes, which has led to further delays.

In terms of the legal timeframe for providing a CETV, this should normally be three months, but the law allows plans to take up to six months if they are affected by “reasons beyond their control”.

But it seems we have passed that deadline as well.

The latest update ‘Delays in processing CETV and PSO’ On the Teachers’ Pension Plan website, published three months ago, it explains how things stand and simply says:

“We are working through the cases and writing to members with numbers when we can. We will provide a further update on estimated timelines for the remaining cases in the coming weeks as pending guidance is finalized.”

One problem is that calculating these numbers is a highly specialized task and programs cannot simply “put more people on the job” unless they are highly trained.

They must also ensure that people receive consistent and fair treatment across the different public sector schemes affected.

I would love to be able to offer you an easy solution but unfortunately I can’t.

The best I can suggest is that you contact your local MP again (who may have changed since last time) and ask them to write again to both the Teachers’ Pension Scheme and the Department for Education highlighting the impact the delays are having and urging them to speed up the process to agree a way forward.

The more people who contact MPs, the more pressure there will be on the Government and the plan to make this issue a priority and finally resolve it for you and all those affected.

The Department of Education was contacted but did not provide any comment for publication.

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