P.S.O. where amount received drastically reduced.

Misca

I'm hoping someone can point me in the right direction, or give me some sound advice please.  I have been through a recent divorce, where I received a PSO from my ex.  
The problem is, it took a long time, 7 months, for Barclays to make the funds available to my new Pension provider, and when I received the funds it was drastically less than I was expecting. I queried this with the company and they advised me that this was due to the recent crash which happened between CETV, PSO and payout.  Also my ex has a GMP pension, and that also has a factor on the funds available to me, apparently.  Barclays said that the CETV figure was only correct at the time it was issued as the figures on my ex's GMP was a factor.  My ex's pension  was and is in payment and they won't be "clawing back" any of his payments that was paid during the whole process.  We both have a pension with Barclays which we gained by working at the same time for the same company and my pension has gone up, not down.  This all meant that my percentage was nearly £40,000 less than I expected and that's just my percentage, which means that the whole "pension pot" as it were has reduced by approx £70,000 on my calculations.  It all doesn't sound right to me, so I just want to know if I should progress this further with the Financial Ombudsman or not? Or if there are any pension gurus who could help me?

Marcon

Misca said:

I'm hoping someone can point me in the right direction, or give me some sound advice please.  I have been through a recent divorce, where I received a PSO from my ex.  
The problem is, it took a long time, 7 months, for Barclays to make the funds available to my new Pension provider, and when I received the funds it was drastically less than I was expecting. I queried this with the company and they advised me that this was due to the recent crash which happened between CETV, PSO and payout.  Also my ex has a GMP pension, and that also has a factor on the funds available to me, apparently.  Barclays said that the CETV figure was only correct at the time it was issued as the figures on my ex's GMP was a factor.  My ex's pension  was and is in payment and they won't be "clawing back" any of his payments that was paid during the whole process.  We both have a pension with Barclays which we gained by working at the same time for the same company and my pension has gone up, not down.  This all meant that my percentage was nearly £40,000 less than I expected and that's just my percentage, which means that the whole "pension pot" as it were has reduced by approx £70,000 on my calculations.  It all doesn't sound right to me, so I just want to know if I should progress this further with the Financial Ombudsman or not? Or if there are any pension gurus who could help me?

The CETV figure does indeed get recalculated at the time actual payment of your share is paid over to a pension arrangement of your choosing, and many people have been similarly distressed to find that they are getting a %age of a much smaller amount. This has been especially true where, as here, market conditions mean the CETV has dropped, often quite dramatically.

It's not clear from your post (not your fault) quite what's been going on here in respect of your ex-husband's GMP - one would expect that to have been clear from the paperwork submitted during the process, and maybe it was. Not one for the Financial Ombudsman, but it's certainly worth asking your solicitor to check that everything has been correctly implemented.

Misca

Hi Marcon, Thank you very much for your very speedy and informative reply.  Being a layperson with Pensions and indeed with divorce proceedings and any subsequent proceedings, I am very confused by all this.  My ex had been receiving his pension before the start of the divorce proceedings and we both had to get CETVs for our pensions.  He had 2 pensions and the PSO was all taken from Barclays, being the larger one.  I wonder if it had been split differently if I would have received a figure closer to what I was expecting. The divorce itself is completed and the PSO was the only thing outstanding, which I put in the hands of a recommended FA.  So my Solicitor employment has ended nearly a year ago now, so I don't believe that is an option to return to the solicitor.  I had already involved the FO because Barclays wouldn't reply to me when I asked them to explain a few things to me as I was initially concerned that my ex had taken a draw down between CETV and PSO completion.

Misca

Marcon, to continue, now that I have received a reply from Barclays, albeit convoluted, I wonder if I should continue with FO to escalate looking into this issue, or if I'm onto a losing battle...

Pat38493

I suspect you are fighting a losing battle in terms of questioning the amount if Marcon is correct.  Normally CETV are valid for a certain number of months after original issue, so if it was a "normal" pension transfer, I would expect the existing CETV to be honoured up to that date (I think it might be 6 months).

When Marcon said the CETV is indeed revalued I am not sure if it was the above point that was referred to, or if there is a special rule with divorce that it's recalculated even within the deadline.

Probably you cannot challenge the change in the valuation.  You can ask your divorce solitcitor if there are any grounds to challenge the original settlement (particularly if you had any evidence that your ex delayed the process deliberately in order to reduce the amount you would get but you don't state that this is a suspicion), but even this might not be possible if the court order was final.

Pat38493

Marcon said:

Misca said:

I'm hoping someone can point me in the right direction, or give me some sound advice please.  I have been through a recent divorce, where I received a PSO from my ex.  
The problem is, it took a long time, 7 months, for Barclays to make the funds available to my new Pension provider, and when I received the funds it was drastically less than I was expecting. I queried this with the company and they advised me that this was due to the recent crash which happened between CETV, PSO and payout.  Also my ex has a GMP pension, and that also has a factor on the funds available to me, apparently.  Barclays said that the CETV figure was only correct at the time it was issued as the figures on my ex's GMP was a factor.  My ex's pension  was and is in payment and they won't be "clawing back" any of his payments that was paid during the whole process.  We both have a pension with Barclays which we gained by working at the same time for the same company and my pension has gone up, not down.  This all meant that my percentage was nearly £40,000 less than I expected and that's just my percentage, which means that the whole "pension pot" as it were has reduced by approx £70,000 on my calculations.  It all doesn't sound right to me, so I just want to know if I should progress this further with the Financial Ombudsman or not? Or if there are any pension gurus who could help me?

The CETV figure does indeed get recalculated at the time actual payment of your share is paid over to a pension arrangement of your choosing, and many people have been similarly distressed to find that they are getting a %age of a much smaller amount. This has been especially true where, as here, market conditions mean the CETV has dropped, often quite dramatically.

It's not clear from your post (not your fault) quite what's been going on here in respect of your ex-husband's GMP - one would expect that to have been clear from the paperwork submitted during the process, and maybe it was. Not one for the Financial Ombudsman, but it's certainly worth asking your solicitor to check that everything has been correctly implemented.

Just for my info Marcon, in this case then where the pension is already in payment, is there a special process for calculating the CETV valuation i.e. it has to be calculated based on the future expected benefits from the valuation date forwards?  

And the person who is already in receipt of pension would get a reduced payment from that moment forward, but the other person would get a specific deferred value in the pension?

Tommyjw

As metioned, this is part of the normal process and ultimately i would have expected a solicitor/adviser involved to explain this. It will often work in the ex's favour (values gone up), in this case it hasn't and does suck. I've been in industry talks before where it was noted solicitors should be steering people away from DB pensions being involved and choosing other assets for reasons just like this.

Misca said:

My ex's pension  was and is in payment and they won't be "clawing back" any of his payments that was paid during the whole process.  

It wouldnt really be for Barclays to tell you anything about your ex's pension and what has or happened with it. But if the correct thing was done, his pension would be reduced by an amount decided by the Scheme actuary (lets just say 50%) from the PSO date. So e.g. the PSO date was June 2023 then his pension would be reduced by the 50% from then. Practically, sometimes that is done immediately as soon as the PSO is received in order to reduce possible overpayments. Other times, it is done later when the divorce itself is implemented (which has to be done within 4 months of receipt of the PSO, as a quick summary) and your scheme is paid the money, and things are then put in place to recover the overpaid pension back to June.

Misca

Thank you Macron, Pat38493 & Tommyjw, After Reading all your advice and knowledgeable info I think the best option for me is to put this to bed and get on with my life.  TBH it's a bit of a relief in one way, that it's all over.  Although my ex seems to have got the better end of the stick... 

Pat38493

Misca said:

Thank you Macron, Pat38493 & Tommyjw, After Reading all your advice and knowledgeable info I think the best option for me is to put this to bed and get on with my life.  TBH it's a bit of a relief in one way, that it's all over.  Although my ex seems to have got the better end of the stick... 

Yes well unfortunately as far as I understand, CETV valuations generally have fallen by 50% or more since they peaked in late 2021.  The CETV valuation should be, in theory, the amount required by the pension scheme to provide the required benefits, so in theory you are not worse off, it's just that the cost to buy the benefits you were deemed to be entitled to has gone down.  In practice though this depends how the transferred money will be used, and my impression as a layperson is that CETV values at any point in time, seem to assume that current interest rates and safe investment yields will stay the same for a long time into the future (which generally nobody knows about).

Albermarle

Generally I was under the impression ( maybe wrongly) that PSO for a DB pension, usually resulted in both parties getting a share of the pension income, as opposed to a % of the CETV ?
Or maybe it is different for public sector schemes as opposed to private ones ?

Marcon

Albermarle said:

Generally I was under the impression ( maybe wrongly) that PSO for a DB pension, usually resulted in both parties getting a share of the pension income, as opposed to a % of the CETV ?
Or maybe it is different for public sector schemes as opposed to private ones ?

That's earmarking.

Pension sharing could result in the ex being allowed to keep their benefits in the original scheme, in which case they'd effectively get a 'share' in the pension income, but many schemes require an ex to transfer out.