I don't want to hijack this post but if the OP's wife has her own pension plan, does the OP have a right to look for a payment from that on her retirement also ? Or is she obliged to declare that she will have this additional income in the future ?
Very good point and one that the OP should pursue.
As other posters have said, it's impossible to predict what the courts will decide as they tend to look at pensions 'in the round' as part of the overall divorce settlement. But this means that the pension schemes of both spouses should be taken into account in deciding on the terms of a Pensions Adjustment Order. There is a very good booklet on the pension provisions of the Family Law Acts on the Pensions Board website which you can download for free at
http://www.pensionsboard.ie/index.asp?locID=358&docID=405&COMMAND=PRINTER
In my experience, very few lawyers fully understand the pensions provisions of the Family Law Acts and it's not uncommon for judges to decree Pension Adjustment Orders that are unenforceable. The entire area is very poorly understood.
It's sounds as if your employer's pensions department also don't understand how PAOs work as the non-member spouse is entitled to a pro rata share of any lump sum option applying on retirement. For example, if she is entitled to 30% of your retirement pension, she is also entitled to 30% of the retirement lump sum option and you are only entitled to 70%,
whether or not she exercises her 30% option. Also, whatever order applies to your retirement pension also applies to any spouse's death after retirement pension. You can not differentiate under a PAO between one aspect of your retirement benefits and another aspect.
A separate order can however be made in relation to contingent benefits i.e. benefits payable if you die while still in the service of your employer. Where many court orders go wrong is in thinking that the spouse's death after retirement pension is a contingent benefit instead of a retirement benefit.
If you read the Pensions Board booklet, it should make things a bit clearer. However, it will require a bit of effort as the law is quite complicated and, as stated above, is often poorly understood by the legal profession.
Regards
Homer