Is getting an actuary worth it?

[FurrySofa]

Just finalising my divorce. It's pretty amicable.

We have agreed that he will take 50% of my pension in the settlement (I had one, he didn't) but only for the period of our marriage up until the point of separation.

So, I paid into my pension from 1998 until present, we were married in 2001 and separated in 2016. So there were 15 years where the pension was a joint asset.

Would an actuary be able to easily calculate how much this equates to based on the transfer value figures I have got from my pension trustees?

My stbx has suggested that it's a fairly straightforward calculation of the number of years we are talking about (so value of fund divided by the number of years I have been paying in, times 15 to reach number of years marriage lasted, divided by two = £££ value of fund/22 x 15 and then halved)

However as the value of the fund will have increased over time that doesn't seem to be accurate to me.

I want to protect my future and am wondering if paying what I understand to be £££ for an actuary would help? Or whether I am just tying myself up in knots!

Would appreciate mnet hive mind!

As an IFA I would say get an actuary to look at it.

Posted too soon.

Transfer values fluctuate and there are ancillary benefits and guarantees that need to be considered. I would get an actuary to look at it for your own protection.

Thanks @PercyKirke. Next question is- how do I go about getting an actuary?!

My husband is a life actuary and suggests getting an actuary to look at it, try a pensions consultancy firm.

Is your pension DB/final salary?

If so you need an actuary. And how are you getting this formally agreed? Court?

The normal process would be:

• scheme member obtains value of pension
• Court date happens and the split of the pension is agreed and told to the scheme administrator and actuary
• final split is calculated and added onto the system for administration in the future.

I would call your pension scheme administrator. Explain the situation and go from there. They are likely to sort your case with the actuary that runs the scheme and who knows the scheme very well.

You likely need something formal for them to split it.

The above is for a DB pension, DC would be different.

How much is the pension pot notionally worth? Whilst it may be good practice to get an actuary, you’d need to judge whether the fees that you’d pay are worth the possible difference in settlement.

Thanks for the post. Answers to questions:

I've had the transfer value offer from the scheme administrators, but they have declined to provide the actuarial calculation as it needs to be based on the value at 2016, not current.

Yes it's final salary with a current transfer value of £767k. Obvs not transferring the whole out, just the agreed share.

Stbx thinks that we need to agree the percentage and ask them to transfer that.

We understood that we couldn't actually get a divorce until we'd agreed the financial arrangements, then the court confirms that it is happy with the proposal via a court order and then we can proceed and get it enacted. Have I got this wrong? (Entirely possible!)

Posts! Thank you for taking the time to respond all :)

So I’m not a lawyer but basically you/the judge (?) decides on the split whilst taking into account all your assets.

You then end up with a formal doc that says he will get (for example) 50% of the value of your pension.

You then send this to your pension administrators.

They speak to the actuary who will calculate what deduction to your pension is equivalent to 50% of the current transfer value. This deduction sits on your record and at the point your retire they calculate your pension and take off the deduction.

From your ExH’s POV they will either offer him a pension in the scheme (if that is an option, it isn’t always) or he will have to transfer his amount elsewhere. If he stays in the scheme himself they take his half of the £767k and calculate an equivalent pension for him that sits entirely separate to you. If he transfers elsewhere they would ask him to decide on the receiving scheme and pay across the lump of half of £767k.

In terms of the implementation process you don’t need a separate actuary, it is the scheme actuary’s job and the administrator’s job to sort this out. They may charge but you could ask the administrators about that.

Heavy caveat that I don’t know your scheme or circumstances and you need to ask your lawyers about all this, and that your scheme administrator will know more so you can always call and ask them.

He is transferring his portion out, its not open to new members now.

The scheme administrators have said they have declined to provide the actuarial figures because the divorce is happening in England and the calculation isn't required under English divorce law. If it had been Scotland, I understand from them that the calculation would be required under Scots law so they would do it. (It's the bit about the valuation being based on a past date that apparently this is in relation to.)

Oh, my brain needs a good shake up with all this!

Can’t you just contact an actuary Or two and ask for a fee quote for doing the work ?

The fact that your husband is saying “ Don’t get expert advice, just do as I say” would make me very suspicious that it’s to his advantage.

But do you need to know more than the £767k?

The actuarial calcs to take your pension and produce a current value of it are quite complicated and tbh are fairly unhelpful for you to look at.

And don’t worry, pensions are complicated!

I'm an actuary and would advise you to hire an actuary. I doubt you have many other assets worth that much, you want to get the split right.

You and your ex may also want to consider whether it's best for him to take a portion of your pension, or just take that into account in the overall split - so it may be more advantageous for him to get a bigger share of the house, but your pension is untouched so you both have equal assets.

You want to get proper, personal advice on this.

I used to work in pensions...it might be worth asking the scheme administrators if you can pay for the scheme actuary to do the work you need. The scheme wouldn't normally pay for bespoke calculation work above and beyond what they are actually required to, but it might be more cost effective for you to pay their actuary for the work rather than find your own who won't be familiar with all the ins and outs of the scheme anyway.

I think maybe it’s worth saying here that an actuary wouldn’t be able to tell you what percentage to split it. You need financial advice for that, or maybe the judge decides when you split your other assets? I don’t know divorce ins and outs.

The actuary will just do an actuarial calc using prescribed methods. If you find one yourself and pay for them you will pay through the nose and likely gain nothing more than another value similar to the £767k. We are expensive.

Speak to your lawyer. Ask them who decides on how the pension is split.

I had an independent actuary ( costs range 1.2k to 2k). Their report was asked to calculate the amount that would need to be transferred from ExH's pension pot to mine, in order for us to have an equitable pension at retirement age. Therefore my pensions were also looked at & part of the calcualtions.
It wasn't just a case of having a %.
Hope that helps.

We split the cost. The actuary was booked up for a good month or so. When the figures come back, CHECK THEM!
There were mistakes (initially!)