Final Salary Pension Scheme (H age 50, W age 50), H is in the member
Normal retirement age in the scheme is age 60
Accrued pension to H from age 60 = £10,000 p.a.
40% share to W
Pension credit granted to W = £100,000 x 40% = £40,000
Credit pension fund for W is invested in a personal pension type arrangement say and will grow with investment returns until W’s 60th birthday
On reaching age 60 part of W’s fund may be taken as a cash lump sum (often 25% of the fund) with the residual fund being used to provide a pension income either by way of buying an annuity or by opting for pension drawdown.
Should an annuity be purchased, W will have the choice as to the rate of increase of the annuity income, whether any minimum payment period will apply, whether to provide additional benefits for a future spouse on death etc.