Pesion sharing annexe (divorce)

xylophone

it sounds like a final salary pension

.

Not necessarily - see

http://www.burges-salmon.com/practices/private_client/publications/pension_sharing.pdf

The OP's partner needs to clarify?

jamesd

Best to say more about just what pension this is. A defined benefit pension would have a pension pot value not a CETV. Defined contribution pensions usually have investments that the person can choose. Defined benefit pensions are usually ones that have benefits expressed in terms of 60ths or 80ths of pay per year worked or similar.

It's only possible to guess but it appears that this is one of two cases:

1. It's defined benefit and the pension providers have made a mistake. Instead of using half the value on the specified date they have used half of the value at the time the benefits are to be received, usually a substantially higher amount. To fix this they should use the CETV at the time of the court order and adjust that with inflation. Once it comes time to pay the pension they calculate the CETV again and the split between inflation-adjusted old CETV / current CETV is the proportion of the pension that should be paid to the person who's to get the split part. I write it this way because this is the way that gives each party the correct value, without the receiving person getting extra benefit for all of the extra years of working at the firm and paying in money. But this paragraph assumes that for some reason the scheme couldn't just transfer some of the value at the time of the order into a pension for the receiving person and keep the rest for the original person - which is a better approach if they could do it. Another possible approach might be to get that old CETV, work out the proportion today, and have the recipient transfer that value into a defined contribution pension pot of their own, which would let them retire any time after age 55 or even, as of next April, take out all of their share as a lump sum.

2. It's defined contribution but the solicitors and former couple didn't get together to have the receiving person open a pension of their own so that half of the value on the specified date could be transferred into it. If so, the resolution would be to get the counts of the units in the pension at that time and work out how their values changed over time, then transfer that current value now. There can be various complexities to that but it's the general approach to get things fixed without depriving either party of what they should have.

3. It's also possible to have a defined benefit pension where the pension people are told to give the spouse a fixed part of the value at the time the pension is taken, not at the time of the divorce. That'd be a pensions attachment or earmarking order, not a pension sharing order. It might be that the pension people mistakenly thought that this is what they were told to set up.

So, something wrong at the moment but it's fixable, just takes sorting out which method of fixing is needed. My guess is that this is really a defined benefit (final or average salary or similar) pension and the first fix would be the way to go.

However it is to be done, best to get it done now. Hopefully it'll be either DC or the DB type where a pension split can be done to give the recipient a pension of their own within the scheme. That gives them both the advantage of being completely independent of each other.

xylophone

The reason I write that is because a pension sharing order would normally be for a defined benefit pension like final or average salary. That is also the type that would have a CETV.

The term appears to be used in either case?

http://www.sharingpensions.co.uk/valuations.htm

http://www.sharingpensions.co.uk/pensharing3.htm

jamesd

It certainly can be. I think it's clearer if I edit my post to not use the term in that way, so I will. thanks.

System

Hi

Firstly get a definitive assessment from the fund, Annual Benefit Statement generation may not split the value out.

Now in my time the 'Pension Sharing Orders' people had their records pulled and were sent an individual letter outlining the situation.

There may be a preserved benefit (Deferred Benefit - DB) in the name of the ex-spouse, but this would be confidential and your OH would have no knowledge about it.

Seek a solicitor and get the court judgement explained or amended if needed.

Of course there is another possibility, leave the country and live on a barge cruising the French canals. UK court cant trace you and you don't sign the paperwork or give over the stated amount. That way nobody gets paid, yes we had such a case.

atush

nobody was asking about that.

pandakins99

My understanding is that for a DB pension, if there is a pension sharing order that a CETV is calculated and the former spouse gets a pension credit, which they can transfer away or keep in the Scheme - if that is an option.


But for the original member there is a pension debit, which is a 'negative' deferred pension. That 'negative' deferred pension receives the same increases as any other deferred pension would have had since the date of the pension share and is deducted from the members pension when they leave/retire etc.


It makes no difference if the ex-Spouse transferred their share of the CETV to say, Scottish Widows, or were awarded a 'pension credit' in the original scheme. It will always be a debit on the member's ongoing pension. That has been the case with pension shares since it all came in in 2000-ish.


With DC it is a true clean break.

SallyG

Are you looking at this form?
http://www.jordanpublishing.co.uk/system/uploads/attachments/0002/0925/Form_P1.pdf
Is it a copy or is it the original ? - if it's the original and wasn't sent to court so that the judge could issue a pension sharing order to the pension scheme, that could explain the lack of pension splitting?