Once the report has found how much pension capital has to pass, there is a second question: which pension should the order be made against? The answer can change what the receiving person actually gets. Here is how we answer it, with a worked example.
The short answer
Our default is to place the order on a money-purchase fund first, in full, with any balance on the defined-benefit pension. Where that is not possible, we place it on the largest pension that can carry the whole order.
We also show the order spread pro rata across the arrangements, and we say why we led with the one we chose. The report shows the order on each arrangement it could be made against. The court chooses.
Why a money-purchase fund comes first
A money-purchase pot (a DC fund) is worth its value. We bring it up to the valuation date on the fund's own published prices. When an order is made against it, the fund moves at that value.
A defined-benefit pension is different. We value every pension at fair value: what it would cost, on the valuation date, to secure the same income with no risk. But a defined-benefit scheme applies the order's percentage to its own cash equivalent, not to fair value. Where the cash equivalent is lower, the person receiving the pension share gets less than the capital the calculation found they need.
A money-purchase fund carries no cash-equivalent shortfall. Starting there means less of the order depends on the scheme's own figure.
A worked example
This case is anonymised and its figures are rounded.
The two people were about twenty years from State Pension age. One was in a hybrid scheme with a final-salary section and a money-purchase section. The other was in a public-service career-average scheme. A court order asked for equal income at State Pension age. The report worked out both outcomes: Outcome B, which divides pension capital, and Outcome C, which equalises pension income.
The order was placed on the money-purchase section first:
| Outcome | Money-purchase section | Then the final-salary section |
|---|---|---|
| B (capital) | 100% | about 3% |
| C (income) | 100% | about 13% |
The money-purchase section was used in full, and only the balance fell on the final-salary section. That mattered here. The final-salary section's cash equivalent was about 23% below fair value. Every percentage point placed on that section is applied to a figure well below what the pension is worth.
Two complications
The scheme had not split the pension between its two sections. We estimated the split and reported the effect of the range of possible splits, so the court could see how far the answer depended on it.
The other person's public-service scheme had a cash equivalent above fair value. A comparison of the two pensions by cash equivalent would have misled, in the other direction. In our cases, funded schemes' cash equivalents have been about 9% to 23% below fair value, and one public-service scheme's was above it. The gap can run either way. That is why we value every pension on the same basis and state the cash equivalent beside it.
Pensions the order cannot go on
Some pensions cannot be shared. That is either because the law says so (the State Pension, the Financial Assistance Scheme) or because the instruction keeps them out of the order. They still go into the balance. "Not shareable" only means the order cannot be made against that pension.
In this case both people's State Pensions were valued at their projected full entitlement. The two were equal, so they cancelled out.
When the order does fall on a defined-benefit pension
Where the cash equivalent is below fair value, the certificate shows the receiving person's shortfall in pounds. Beside the order, it shows the order that shares the gap in the instruction's own shares. The first order stays the answer to the instruction. The second holds only at the scheme's quoted figure, and the scheme's figure on the day of transfer may differ.
What to do
- When requesting the scheme data, ask each scheme for its cash equivalent. For a scheme with more than one section, ask how the pension is split between them.
- Tell us in the instruction if any pension is to be kept out of the order. It will still count in the balance.
- Read the report's placement section: which arrangement it leads with, and why.
- Look at the pro-rata alternative before agreeing a different placement.
- Where the order falls on a defined-benefit pension, read the shortfall and the order that shares the gap beside it.
More on how we work is on our Pension Sharing Order page.
Last updated October 2026.