Need a Pension Actuary & Divorce process guidance

Farside71

Your divorce solicitor, if/when you get one, would be able to instruct a PODE to produce a report, and ensure they are asked to do the correct thing.  You need the results of the pension report to be able to then weigh up all the assets against the pension and work out what the best way of splitting all of them up is,  so the result is fair for both of you according to the jurisdiction that you are in.

WYSPECIAL

A 50/50 split is the starting point for negotiations then you can move from there based on needs.

A clean break is preferred, rather than ongoing spousal maintenance, if there are sufficient assets to achieve this. 

Cobbler_tone

List down your assets, find a mediator and look for a decent job. 

Then you’ll have an idea what both of you need. 

There are multiple ways to navigate divorce, e.g. mine involved 100% pension retention…and very little else.

Farside71

Cobbler_tone said:

List down your assets, find a mediator and look for a decent job. 

Then you’ll have an idea what both of you need. 

There are multiple ways to navigate divorce, e.g. mine involved 100% pension retention…and very little else.

Out of general interest, do you have a rough idea of how you weighted the value of your pension against non-pension assets.  I might be ending up in a similar position 

DullGreyGuy

Helen71 said:

Hi, thanks in advance for your guidance and help. I will be divorcing my husband, he has worked for the NHS for 30 years, no private practice. I have very little on my pension pot due to career breaks and raising family to facilitate his career. I have it clear that I will need a pension actuary report for his pension. I am struggling to identify a company that can do this for me. Please advise: 1. On options of companies I can approach.
2. If none are available (Collins are not taking anyone for 6 months), can it be done through the solicitors? But how much more will they charge?
3. Potential timescales & costs
4. Additionally: Is 50% the best I can aspire to? or can I also request maintenance and higher pension access due to my low salary, low pension, being made redundant at the end of the year? It just feels like I am in such a vulnerable situation at 53 and after years of working towards stability. Needless to say, it is him who is leaving the relationship. 
5. Want to be reasonable but also don't want to miss out. 
Thanks

You dont get your own valuation of his pension, his pension scheme has to provide the valuation of the pension as they are the ones with the data on the history of the scheme to be able to draw up the longevity assumptions. Actuaries are like weathermen, the only two jobs where you are not expected to be correct but it's ok as long as you can explain why you were wrong. 

Generally at the end of the divorce both walk away with 50% of the net assets, that doesn't mean everything gets split 50/50 as there is normally horse trading, someone wants the house so the other person gets the pensions etc. Sometimes the divide isnt 50/50 but thats more in the case of short relationships and where one has put much more in than the other noting however childcare, running the home etc is considered "putting in" in most cases even if its not cash. 

Maintenance, other than for children, is not that common, it tends to be relatively short term and is most prevalent where there is a big disparity in salaries and a lifestyle accustomed to the higher income. It does sound you are more in need of a lawyer than an actuary. 

Cobbler_tone

Farside71 said:

Cobbler_tone said:

List down your assets, find a mediator and look for a decent job. 

Then you’ll have an idea what both of you need. 

There are multiple ways to navigate divorce, e.g. mine involved 100% pension retention…and very little else.

Out of general interest, do you have a rough idea of how you weighted the value of your pension against non-pension assets.  I might be ending up in a similar position 

I didn’t get that far. It was a painful, pretty acrimonious, 5 year process.
I funded the whole divorce, cleared all debts etc. On paper my pension was valued way more than the assets, by the time of the divorce way less.
The judge actually rejected it first time around because they said it was imbalanced in my favour, which was pretty unbelievable.
I’ve never worked out the end position, maybe 60/40 to her. She is mortgage free, debt free with all of the contents and a new car I bought, plus £60k cash. 

I still earn 5 times what she does (to my knowledge), she’s did nothing to maximise her earnings and I’m retiring at 58 latest, it probably took 5 years off me! It’s behind me but I feel for anyone going through it. 

In answer to your question. The CETV was a cash amount on the D81 but my only motivation was to fully keep my pension. I would have gone down that road if needed.

PS the CETV was £675k on the D81 and £425k at point of divorce. The drop in CETV was referenced in the letter to the judge to stamp it the second time around but not implicitly as a number.

Farside71

Thanks, I'm awaiting a CETV for my DB, I honestly have no idea what it is going to be as I've not had to request one before even though I've been a deferred member for over 3 years now.  As we are in Scotland about a third of DB accrual is outside of marriage so in theory can remain with me regardless but I'm having to get my head around potentially losing ISAs, avcs, DCs and most of the house to keep all my pension and whether that is in my best interest or not.  In some ways it's a financial decision no one really is expecting to actually have to make given most of us probably spent the vast majority of or working lives thinking about how to accumulate wealth.

GDB2222

As a rough guide, I would value pension at 15% less than other assets like cash in the bank. After all, if you have the cash, you can contribute it to a pension and get at least 20% tax relief. 

Marcon

GDB2222 said:

As a rough guide, I would value pension at 15% less than other assets like cash in the bank. After all, if you have the cash, you can contribute it to a pension and get at least 20% tax relief. 

Just having the cash isn't quite the full picture. You can only contribute a maximum of £3,600 gross (£2,880 net) per year unless you have 'relevant earnings' which would enable you to make higher contributions - and you need to be under age 75 at the time you make the contribution.

GDB2222

Marcon said:

GDB2222 said:

As a rough guide, I would value pension at 15% less than other assets like cash in the bank. After all, if you have the cash, you can contribute it to a pension and get at least 20% tax relief. 

Just having the cash isn't quite the full picture. You can only contribute a maximum of £3,600 gross (£2,880 net) per year unless you have 'relevant earnings' which would enable you to make higher contributions - and you need to be under age 75 at the time you make the contribution.

Alternatively, look at the point where you draw the pension. You can get a quarter tax free, and the rest will be taxed at 20% say. That produces a combined overall tax rate of 15%. 

The point is reasonable that for most divorcing couples £1 of pension fund is worth less than £1 in the bank. It doesn’t matter if everything is just divided in the same proportions. But it does matter if there’s offsetting, where one spouse takes more in the house value and the other takes more pension, say.

Where it gets more complicated is where the CETV doesn’t properly represent the value of the pension.