Pension offsetting is this correct?

TryingVeryHardto

Hi Folks,

I am currently going through a divorce and we have agree to offset my pension against some of the other equity (house, cash etc). I will give broad figures to illustrate my question and any and all advice or comments would be great received. 

House equity £358,000
Cash £70,000

Using my latest pension benefits statement and the Galbraith Tables for DB pension sharing (better/more accurate for DB pensions that CETV) the amount my stb ex wife should receive is £75000 after adjusted for tax (20%). No adjustment has been made for Utility.

We have agreed that my wife will keep the house and take a small mortgage of (58K)

She therefore will have £300K in equity from the divorce.

I will have the £70K cash and the £58K from her (her mortgage amount) add this to the off set pension amount of £75K and I will have taken £203K from the divorce. 

My question is:
Is this correct as even when I add on the pension offset amount of £75K I am still £93K less than her?

Should the calculation not be that instead of passing her the full £75K offset amount I should be passing her half of it as half from me added to hers would be the full £75K.

I will illustrate in the example below what I mean.
We have £2000 that needs split but I need my wife to have 100 more than me after the split. If I give her £100 then she will actually have £200 more. £1000+£100 = £1100 and £1000-£100 = £900. Therefore in order for her to have £100 more than me after the split it should in fact be £50 that I give. £1000+£50 = £1050 and £1000-£50 = £950 therefore £100 more as intended.

Is my thinking wrong here when applied to the pension offsetting?

Thank you

DullGreyGuy

No, you should add the full pension value not just what you would have given her. 

Silvertabby

Will the Divorce Court accept your DIY Galbraith calculation?

A divorce CETV calculation (Form E) is much more complex than just a final figure.  And DullGreyGuy is right - the FULL (pre tax) value of your pension is classed as a marital asset, and this is the figure that should be used in any offsetting agreement.

Note: Am assuming English/Welsh law.  May be more complicated if you are in Scotland.

Cobbler_tone

I guess my situation was similar. On the D81 the CETV and my shares were on my side. The equity and her tiny pension on the other. They were treated equally. I paid the mortgage off, plus whacked her a lump sum. The pension wasn't touched. On paper I got more but in reality at the point of divorce I got a lot less, due to the value of the CETV. That's the thing, due to the nature of some divorces taking years, the CETV is just a moment in time.
Ultimately I was content with the outcome. I am miles better off but that is down to her personal choices of not bothering maximise (or even increase) her earnings potential. No more free meal tickets!!
Good luck.