Pension Offsetting on Divorce
Pension offsetting is the traditional method of dealing with pension rights on divorce and used to be the only way in which pensions could be allowed for in settlements prior to the legislation being introduced to allow pension attachment and pension sharing.
Pension offsetting involves the person with the larger pension rights (usually the husband) keeping his pensions intact and the wife receiving a larger share of the non matrimonial assets as part of the divorce settlement. A common scenario where the wife has little pension saving and where the matrimonial home has a similar value to the pensions would be that the wife keeps the matrimonial home and the husband keeps his pensions intact.
The above solution is however not always appropriate as the matrimonial home may be worth significantly less or significantly more than the difference in value of the husband and wife’s pensions, in which case a part offset and part pension share might be an appropriate way to settle the case.