Are there any advantages of earmarking over a pension sharing order?
The first advantage is that with an earmarking order the former spouse can earmark the members lump sum death benefit in addition to the pension income and tax free lump sum as part of a final salary pension, whereas a pension sharing order can only apply to the pension income and tax free lump sum. This advantage would provide protection to the former spouse if after divorce she received maintenance payments from her former husband. In the event of his death during service, these payments would stop and by earmarking the lump sum death benefit the former spouse will receive this money as compensation. In most cases this benefit will represent four times the scheme members annual salary. Another advantage is that an earmarking order can be used during judicial separation as well as divorce and nullity of marriage whereas a pension sharing order will only apply to divorce and nullity.
