CETV for DB pension for divorce

BarredWarbler

Hi
hoping someone can advise on whether I’m missing something. 

I’m preparing for divorce and want to know the value of my DB pension. It’s a closed private sector DB scheme administered by WTW. I’m a good few years before I can draw from it. It’s about £26k/y last annual statement. I also have DC components in the same pension. 

I asked for CETV for the pension including DB and DC and for the DB portion, I was expecting a pot value of, say, £600+k, but all they’ve said is “£26k a year”. I asked again, pointing out that this doesn’t seem to be a CETV, but they want £250 for a second quote in 12m. 

Am I missing something? Should they not be giving me a single pot value for the DB portion, so that I can work out whether/how to split it? I’ve asked WTW to let me know if they just don’t give CETV for DB pensions but they haven’t said that either, so I really don’t understand what’s going on. Would appreciate if someone can explain. 

Marcon

BarredWarbler said:

Hi
hoping someone can advise on whether I’m missing something. 

I’m preparing for divorce and want to know the value of my DB pension. It’s a closed private sector DB scheme administered by WTW. I’m a good few years before I can draw from it. It’s about £26k/y last annual statement. I also have DC components in the same pension. 

I asked for CETV for the pension including DB and DC and for the DB portion, I was expecting a pot value of, say, £600+k, but all they’ve said is “£26k a year”. 

That certainly isn't a CETV! It's quite odd for an administrator to make that sort of slip, so I wonder if your original request may have been along the lines of asking for the current value and the wires were duly crossed...

You need to specify that you require a CETV for divorce purposes. You must specify that's what it is needed for - the information has to be provided in a particular format.

Go back to WTW and confirm that's the case and you should get what you need. If they come back with another '£x a year' type answer, raise a complaint.

hyubh

BarredWarbler said:

Hi
hoping someone can advise on whether I’m missing something. 

I’m preparing for divorce and want to know the value of my DB pension. It’s a closed private sector DB scheme administered by WTW. I’m a good few years before I can draw from it. It’s about £26k/y last annual statement. I also have DC components in the same pension. 

I asked for CETV for the pension including DB and DC and for the DB portion, I was expecting a pot value of, say, £600+k, but all they’ve said is “£26k a year”. I asked again, pointing out that this doesn’t seem to be a CETV, but they want £250 for a second quote in 12m.

You're right, that's neither a regular CETV nor a CETV more specifically for divorce purposes (they may be different depending on scheme). The 'second quote' charge is alluding to the fact schemes cannot charge for one statutory CETV quote per year, but can (and pretty much all do) for more than one within a 12 month period. Whether your needed divorce CETV would count as a non-chargeable would depend on various things, though going by what you've said so far (e.g. no specific time pressures) I'm guessing it wouldn't be.

I’ve asked WTW to let me know if they just don’t give CETV for DB pensions

No, that won't be the case. Stick to your original guns, you asked for a CETV for divorce purposes and didn't receive any sort of CETV.

BarredWarbler

Thanks so much for your comments, I’m glad I’m not being stupid! This is in fact the second time I’ve asked.. even though I’ve said it’s for divorce from the start, they gave me a straight transfer value at first and I had to get that replaced by a transfer value for divorce. In neither of those have they said anything other than “£x/year”. I can’t seem to get through to the administrators on phone, have to speak to Indian call centre who passes on messages so it’s quite frustrating. I’ll raise a complaint. 

Thanks for your help. 

Marcon

BarredWarbler said:

Thanks so much for your comments, I’m glad I’m not being stupid! This is in fact the second time I’ve asked.. even though I’ve said it’s for divorce from the start, they gave me a straight transfer value at first and I had to get that replaced by a transfer value for divorce. In neither of those have they said anything other than “£x/year”. I can’t seem to get through to the administrators on phone, have to speak to Indian call centre who passes on messages so it’s quite frustrating. I’ll raise a complaint. 

Thanks for your help. 

Ask for a copy of the scheme's Internal Dispute Resolution Procedure (if your scheme has a website you may be able to download from that - it's scheme-specific). Knowing a member has asked for a copy normally concentrates a few minds...

Albermarle

BarredWarbler said:

Thanks so much for your comments, I’m glad I’m not being stupid! This is in fact the second time I’ve asked.. even though I’ve said it’s for divorce from the start, they gave me a straight transfer value at first and I had to get that replaced by a transfer value for divorce. In neither of those have they said anything other than “£x/year”. I can’t seem to get through to the administrators on phone, have to speak to Indian call centre who passes on messages so it’s quite frustrating. I’ll raise a complaint. 

Thanks for your help. 

As you are beginning to realise, one problem you have is that some of these large pension administrators, including WTW, are a bit hopeless at responding and prone to making mistakes.

penners324

Untrained call centre staff.

Complaint yes. 

Though the probably need an email or letter request for what you need

xylophone

Which scheme is it?

How to Request a CETV from WTW

• Specify the Purpose: When contacting WTW, you must explicitly state that the CETV is required for "divorce" or "dissolution of a civil partnership" purposes. This ensures the valuation is provided in the correct legal format for court proceedings.
• Contact the Administration Team: Use the contact information provided in your pension scheme's annual statement or member booklet. WTW provides administration services for multiple schemes (e.g., RBS, Honeywell, RNLI), so the contact details may vary depending on your specific plan.
• Complete Required Forms: WTW will typically send you an information pack, which may include forms (such as a PD1 or similar application) for you and potentially your ex-spouse/partner to complete.
• Allow Sufficient Time: The administration process can take time. WTW and other administrators usually aim to provide the valuation within three months, but delays are common.
• Be Aware of Fees: You are legally entitled to one free CETV per year for divorce purposes in most cases. A second request within 12 months may incur a fee, as outlined in the scheme's schedule of charges. 
• Important Considerations
• Annual Statements are Not Enough: Your annual pension statement's estimated value is not sufficient for court purposes. A specific CETV calculation is needed.
• Recalculation: The CETV is an estimated value at the time of calculation. If a pension sharing order is ultimately made, the value will be recalculated on or around the date the order takes effect.
• Professional Advice: Pensions on divorce can be complex. It is highly recommended to seek professional advice from a family lawyer or an independent financial adviser (IFA) to ensure all assets are valued and split fairly. You can also use free resources from MoneyHelper. 

Example

https://epa.towerswatson.com/accounts/hwl/public/honeywell-retirement-plan-what-if-divorce/

BarredWarbler

Update: I emailed them with the title “formal complaint” setting out the situation and they came back within a day with a CETV. 

It’s surprisingly low, £545k for a £26k/y DB pension (inflation linked up to 12% a year). I wouldn’t have thought that’s a big enough pot but nvm I’ve got a number now. Thanks again everyone really appreciate your comments. 

QrizB

Glad you've got a reply so quickly!

IMHO 20x is not unusual.

Marcon

BarredWarbler said:

Update: I emailed them with the title “formal complaint” setting out the situation and they came back within a day with a CETV. 

It’s surprisingly low, £545k for a £26k/y DB pension (inflation linked up to 12% a year). I wouldn’t have thought that’s a big enough pot but nvm I’ve got a number now. Thanks again everyone really appreciate your comments. 

It's not a 'pot' (although that now seems to be the term used colloquially to describe a CETV). It's the actuary's best estimate of what it would cost the scheme 'today' to provide the promised benefits. The figure can fluctuate considerably, not just in terms of changes in market conditions, but also things like changes in a scheme's investment strategy. If a scheme is aiming for high levels of growth and assuming - possibly optimistically! - high levels of return, then it follows that the CETV will be lower because the scheme is working on the basis that the scheme assets will grow more than if the trustees follow a different strategy.

It would be unusual to find a scheme which guarantees increases of up to 12%. If there's any chance part of that increase might be discretionary, then it is unlikely any discretionary part would be taken into consideration when calculating the CETV.

Either way, a lower CETV is good news for you. Your benefits remain the same regardless, but there's less to take into account during financial settlement discussions. 

Have they provided this in the format required for divorce proceedings?

BarredWarbler said:

Am I missing something? Should they not be giving me a single pot value for the DB portion, so that I can work out whether/how to split it? 

It may not be entirely your decision, depending on what your ex has in mind and whether there are sufficient 'other' assets available to permit offsetting.