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Divorce/separation

Here you'll find divorce help and support from other Mners. For legal advice, you may find Advice Now guides useful.

Original poster

What happens to a final salary pension on divorce? Any actuary here?

63 replies

numbbrain · 20/01/2018 23:16

Me and Ex are divorcing and have had mediation sessions to discuss finances.

There is one question that the mediator cannot answer:

With the Final salary pension we have a cetv. But if say half that sum is taken and given to me. When he retires in say 10 years time, how is his pension calculated. Will he still get 1/60 times total years at work.

Thanks

OP posts:
MrsBertBibby · 26/01/2018 08:15

Yes, hence the need, as I have said, for both proper legal advice, and an actuarial report from a pension expert.

Imagine123 · 26/01/2018 09:21

Does he only have one pension? If he has two equal pensions, is it better (or even possible) to take one pension each?
I don't know if that's possible but it's something I'm going to ask about when i instruct a solicitor.

Original poster
numbbrain · 26/01/2018 17:41

Don't they take into account that I have very little (looked after children) and do not have the earning potential he has.

OP posts:
MrsPussinBoots · 26/01/2018 18:05

I've worked (Admin) on the post-decision side. You'll get a letter from the court confirming the monetary value you're entitled to from his pension. Then take that to an IFA and transfer the money into your own pension. Yes you'll pay charges but they should be cleared within 6 months and then the money can grow until your retirement.

Original poster
numbbrain · 08/02/2018 21:43

You have all given me such great advice and help - Thankyou x

So this evening we have tried to come to an agreement together. But XH is a mathematician and I feel a bit overwhelmed with percentages and splits.

Any advice that anyone can give based on his calculations would be fantastic. I don;t want to be hoodwinked by him and his Maths.

House equity - £298K
Savings - £73k
At the moment he has access to all the savings, I am living in the house.

We have agreed that he will take the bulk of the savings to use as a deposit on another house for him.

He has 2 pensions £100k contributions and £496k final salary.
I have teachers pension CETV of 24k

His salary 80k +40k bonus , mine 20k.

How on earth do we share it all fairly? He says that because I have the house equity, the pension is worth less than house equity.

I am getting beyond myself on what to do next.

We've had 3 mediation sessions and she won;t give any pointers or advice.

OP posts:
MrsBertBibby · 08/02/2018 22:19

Please see a solicitor! The mediator cannot advise.

wobytide · 08/02/2018 23:33

You quote house equity but not house value and mortgage. If you can't afford the mortgage it's not feasible regardless. With £600k in pensions and £370k in assets/equity there will likely be a need to transfer some pension especially given wage disparity. But without all the other details about length of marriage and kids it's all guesswork. As MrsBert says solicitors are your best bet

Jon66 · 08/02/2018 23:48

Please please see a solicitor, you cannot possibly agree anything unless you know to what you are entitled.

notapizzaeater · 09/02/2018 15:34

When. My mum got an actuary report it wasn't based in the value of the pension now, but the value at the end ..... you really need a solicitor to work it all out .

Original poster
numbbrain · 11/02/2018 18:51

I have made an appointment to talk this week with a family law solicitor.

According to exH and the legal advice that he has been given, asset split is 50-50 for a complete break and they will not look at pension in the future - just now.

I will still have 73k mortgage to pay. He is having endowment that would pay 50k of that off to use as deposit to buy a house.

We have 3 children, 1 at uni and 2 starting this year.

OP posts:
Sabina1234 · 18/02/2018 16:09

I am in mediation and have been advised by the mediator that I wouldn't necessarily get half his pension. Is this right? I haven't build up a pension as I haven't had a full time paid job. He has a pension worth 160,000 as he was in civil service for 25 years, Not sure what I'm entitled to.

Thesecondtoast · 18/02/2018 16:15

Usually it is all up for negotiation. Exws often take the house and cash assets in return for not touching the pension. It depends what is important to each party and often the exw wants to keep the house.

Sabina1234 · 18/02/2018 18:53

We have agreed to sell house and go 50/50. In just not sure what I'm entitled to in regards pension. It's important for me to have a pension as I haven't accumulated enough and I'm 47 years old now as I understand it I have an 3 options to get a percentage when he retires, settle on a bigger share of the house or I can put into my own pension. Is this right?

Bubbles2018 · 18/02/2018 22:05

Hi,
Is it worth getting an express pension valuation (EPV) done before I go for an actuarial report? Ex is currently receiving his police pension, we were married his whole 30 years service..

pinkhorse · 19/02/2018 14:59

@Bubbles2018 sorry for not replying sooner. An EPV really isn't worth very much.it costs about £80 and is based on quite generic questions. A proper detailed actuarial valuation costs approx £2k and is very detailed.

Of all the cases I've seen in my career they all base the figures on the CETV anyway. This is the standard figure you get from your pension provider when you ask for a divorce value.

Goldilocks3Bears · 20/02/2018 07:29

I just did this. You MUST get an actuary report. It’s worth the 1k fee. Make sure you ask what the estimated paid out benefit would be. This is important. You then need to compare to a regular pension. For example, my 33% share of XH pension will pay out approx 700 pcm. I’d have to save about 300k in the next 20 years to get that on a regular pension scheme.

The cetv value I got was almost the same as his equity out of the house but the maths make sense. First of all he’s got cash to move on and second, the long term value of the pension is worth more to me than the same amount in equity now.

Also remember that if you are allocated a portion of his pension now, that portion freezes. So if he’s on 40k salary now, you get a calculation based on that. Say you get half. Your half is worked out on 40k when you retire. His half continues to grow with his salary so if he is super senior when he retires, his half might be worth much much more. This is an interesting point for the court to consider.

If your ex is anything like mine he will fight tooth and nail against this.

Original poster
numbbrain · 23/02/2018 23:04

So I spoke to a family law solicitor, who advised me to speak to an IFA that they use.

I spoke to them and they advised against an actuarial report, and said that most will calculate the cetv based on a divorce (which XH asked for) and that it's probably not worth going for the report at £2k.

Would love to hear others experience of what their cetv was and what difference the actuarial report made.

OP posts:
Original poster
numbbrain · 23/02/2018 23:09

Pinkhorse

You say that the courts use the CETV rather than an actuarial report. Does this apply to all pension types including final salary schemes that are not contribution based?

I'm really stuck between some saying definitely get an actuarial report and an IFA saying not to.

OP posts:
notapizzaeater · 24/02/2018 00:37

My my was advised to get an actuary report, she walked away with far far more than she thought she would. They worked out what her share needed to be to be equal to my dads at retirement

MrsBertBibby · 24/02/2018 07:16

The IF A has no idea what the actuarial report does. Nor does your solicitor.

It isn't just recalculation of CETV you want, it's advice on what share you need to get the same benefits as him.

The last one of these I did was a good example. In order for the couple, who were nearly at retirement age, to have the same incomes, the wife needed 100% of husband's smaller money purchase scheme, plus about half the defined benefits scheme. Not because the TVS were recalculated, but because the benefits she could buy on the open market were so much less than what H got in his final salary scheme.
Had she accepted half the transfer values, she would have been much worse off than H.

But if your solicitor doesn't actually understand how these things work, you're screwed anyway.

CornforthWhite · 24/02/2018 07:43

Don't trust the IFA get an actuarial report

MrsBertBibby · 24/02/2018 08:28

The trouble is that your solicitor doesn't know what to ask the actuary to do.

Instructing an expert is in itself a job requiring some competence.

BatshitCrazyWoman · 24/02/2018 09:27

I'm another one urging you to get an actuary report. The cost of mine was shared between is (ex hated that but the court ordered it). My situation was similar to the one MrsBert outlined - what he was offering wouldn't give me an equal income on retirement. I got way more than he offered (very long marriage). Literally, about £300,000 of pension more Shock

Original poster
numbbrain · 24/02/2018 10:06

Wow, thats interesting. DH has said that because we are going for a complete split, they won't look at the future payments on retirement, just the value it is now.

Is he wrong? We are both aged 53.

OP posts:
MrsBertBibby · 24/02/2018 10:09

He is half right.

They can look at what your current pension pots will provide, and advise how to share those fairly.

The pension the parties earn in the future is not shareable, and since either of them could lose earning capacity tomorrow, it's difficult for a court to consider it.