Splitting Pension Pot (Help/advice with figures)

duff67

Unfortunately in the throes of Divorce.

Background

I have obtained my CETV figure.

I am keen to protect my pre martial and post separation years and have calculated this amount on a straight line division basis which is the closest I as a 'lay man' can get

I know those who deal in pensions would pull out hair based on my assumptions - apologies

Anyway - I have a CETV. I have minused a figure for Pre martial years and minused again the figure for pose separation. This gives me 'Y'.

I have taken 'Y' and divided by 2 to reflect 50/50 split.

Question

I have tried to approach my Pension provider (RBS Group) to ask what is required for me to understand what my resultant CETV pot and the other CETV pot for my wife - results in as a monthly amount if taken at aged 55 & 60.

That, in my opinion will help me gauge if it is a 'fair figure' that my wife can use.

However, I am told this can't be done. Apparently once we have agreed the split and obtained a Pension Sharing Order (PSO) and presented that, - then the pot will be divided as per the PSO and then figures can be provided at a cost of £200 for provision.

Doesn't seem to me as the right way to assist couples trying to work out whats best when life's curve ball adjusts long term plans and stability.

Is this correct or should I be able to get an indicative monthly amount from a resultant pot ?

Would welcome some guidance.


(I need to add that spending funds/fees on Pension Advisers is a limited option so any general guidance here would be of value)

Thanks to all

xylophone

I am keen to protect my pre martial and post separation years

An unfortunate typo - or perhaps not a typo..:eek:


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

http://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/when-relationships-end

http://adviser.royallondon.com/pensions/technical-central/information-guidance/pensions-and-divorce/how-pension-sharing-works/

Finst

Firstly, your straight-line approach for splitting out pre-marital accrued pension is vaguely sensible, but probably favours your wife. Most pension schemes have gradually been made less valuable over the years - so you may find your early years were worth proportionately more.

The way to deal with this would be to ask what your total accrued pension is (pension, not value), and how much of that is based on service prior to your marriage.

Secondly, to your question:

You don't have a pot, you have a promise to pay a certain level of pension from a certain age. From this, an estimate of the value has been calculated (the CETV). If you try to work out the pension based on the CETV, you are converting the pension to a lump sum and then back again, its not necessary.

If you are going to give some of your pension to your wife, then the way it works is:

- You both get CETVs, these are then used as the values of your pension assets, and added to any other assets, house, savings, etc
- You'll together work out the £ amount of value to transfer, based on all your other assets (Note, you don't have to transfer any, you could give her other assets such as a house or savings instead)
- This is converted into a % of your pension
-Your pension is reduced by that %
- Your wife gets a sum of money equal to that % of the updated CETV, to invest in a pension of her own

I hope that helps you understand it better

duff67

xylophone wrote: »

An unfortunate typo - or perhaps not a typo..:eek:


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

http://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/when-relationships-end

http://adviser.royallondon.com/pensions/technical-central/information-guidance/pensions-and-divorce/how-pension-sharing-works/

An unfortunate typo yes - but maybe not wrong either way

Thanks for the links - I will take a look. Appreciate.

duff67

Finst wrote: »

Firstly, your straight-line approach for splitting out pre-marital accrued pension is vaguely sensible, but probably favours your wife. Most pension schemes have gradually been made less valuable over the years - so you may find your early years were worth proportionately more.

The way to deal with this would be to ask what your total accrued pension is (pension, not value), and how much of that is based on service prior to your marriage.

Secondly, to your question:

You don't have a pot, you have a promise to pay a certain level of pension from a certain age. From this, an estimate of the value has been calculated (the CETV). If you try to work out the pension based on the CETV, you are converting the pension to a lump sum and then back again, its not necessary.

If you are going to give some of your pension to your wife, then the way it works is:

- You both get CETVs, these are then used as the values of your pension assets, and added to any other assets, house, savings, etc
- You'll together work out the £ amount of value to transfer, based on all your other assets (Note, you don't have to transfer any, you could give her other assets such as a house or savings instead)
- This is converted into a % of your pension
-Your pension is reduced by that %
- Your wife gets a sum of money equal to that % of the updated CETV, to invest in a pension of her own

I hope that helps you understand it better

Really appreciate the example and your help

I realise the CETV 'pot' is a promise as opposed a sum of money but am relatively and fortunately able to consider it secure for future payments.

Looking at a simple example of how it would work from your list above :

Lets say my CETV is 40. My wife's CETV is 5. House is 35. Svgs 0.

So solicitor would add all ie 80 / 2 (law leads to 50/50) and we would both get 40. ? ?

However the house needs to be split 50/50 in cash as each party needs cash for new property, which leaves the pension of 45 to be split 50/50 which doesn't reflect pre marital sole early years nor post separation.

So - straight line approach is to work out over total years of pension acrue that 24% was earned pre marriage and 21% post separation. That leaves 55% of CETV to be divided 50/50 ??

So property sale = 50%cash each and pension, in the example, >>

40 + 5 (pensions) x 55% = 24.75 / 2 = 12.375.

Resultant

Me - 12.375 ^ plus 9.6 (24% ^) plus 8.4 (21% ^) = 30.37

Wife - 12.375 + 2.2 (pre/post adj on her 5) = 14.57

added together to 45 pension pot (close enough !!lol).

We've not really got much other than house/pension to share .

Is that a handle ??