E Form - Pension Order - what do I say?

[Emptyinsidetothecore]

STBEH is getting a cash equivalent transfer value (CETV) from his pension provider (public sector, so defined benefit) and this will take a few more weeks. He's mentioned that I can have a "pot" which (he says) is normally how it works (apparently) but I don't know what that terminology is, or if that is right.

The E Form states the following options:
Pension sharing order
Pension attachment order
Pension compensation order
Pension compensation attachment order

I think it is a pension attachment order that he's saying, but looking at the cons, I would have to wait for that at my retirement age and if he dies, I might not get it.

My pension is a contributory, decent amount but I know his will be significantly bigger, and he needs the equity / cash from the house/savings, so doesn't want to use that money to buy me out of the pension (I'm guessing) so wants this other way of giving me a portion of his pension.

I'm nearing the end of completing the E Form so any input from anyone in a similar situation would be good, but specifically, where it asks under section 5, what pension order you are requesting, what do I say out of those options above?

Pension sharing order

Thank you @millymollymoomoo It's so confusing!

Also, his public sector CETV is likely to be lower than it's true value. An actuary report, though costly will give a fairer value for sharing.
The difference could be c £100k, depending on how long he's been with his employer and his salary.

Thank you for this. You’re the second person to tell me. I’ve mentioned it to the mediator and STBEH and they both poo-poo’d my thought. I definitely will be getting an actuary report.

My STBEXH has that public sector pension too, I've been advised to get an actuary but they quoted £2k which really put me off.

I was advised by my solicitor - I have a much bigger pension that my ex husband - that you don't use the CEV as a straightforward value - eg if my CEV was £100k it's actually more like £60k if it came down to it to negotiate a split

If you plan on getting a percentage of his pension then you might not bother with an actuary report (costs £2k+).
You get your own pension pot so it doesn't matter to you when he dies.
They cost a few thousand to set up so try and get him to agree to pay all the costs if you do decide to do it that way.

Thank you. It’s all very confusing.

I suppose I don’t actually know what I want, other than 50% of his pot (and he has 50% of mine) but it doesn’t work like that as we’re comparing apples and pears with the two pensions.

I need to a real life example of how it’s worked for people under the different ways, and why their way was better.

So in this case your CETV wasn’t at all helpful? It inflated the figure? 🤔

Do you have a solicitor?
you may or may not be entitled to 50% of total marital
assets. Could be more, could be less
and in getting to whatever split is ‘fair’ could be reached in number of ways, eg 70% equity plus 10% pension or whatever

remember also that £1 in a pension is not equal to £1 in a pension pot as that is not a liquid asset and it’s value is a projection

CETV is an offer not an actual valuation - so it can vary either way of the true value. A CETV given a year ago for example is likely to be way higher than it’s now current value.

Meant to say £1 in equity not equal to £1 in pension …..

or less as in the DM Money Affairs section today.

However you put the value of your pension as determined by the CETV and he puts his alongside. The aim is to create an equal division for you. By the time the financial order is done then the CETV may have gone up or down depending on world markets - my share was down due to the pension company's inefficiency in not processing it further. I got a goodwill one off payment from their inefficiency.

I don't know what @millymollymoomoo is referring to but a wise woman once advised me not to take equity over pension. A pension share is your future.

But while that's true for a defined contribution scheme, it's not for a defined benefit scheme. The value is fixed based on salary and service - that's kind of the point!

I do have a solicitor who’d advised based on our situation (pretty even earnings over the years, mine higher more recently, 50/50 split on DC, no debt, mortgage left is low, either one of us could buy other out) it should be a pretty clean split.

The sticking point was pension as we have no idea what his is worth because it’s taking months for the report. I don’t even have a ball park. I know my pension is £100k and I’ve only paid into it for 9 years (contributory) whereas his is over 20 years as a defined benefit.

I do understand that £1 in a pension isn’t the same as £1 in equity, and actually I don’t want the equity off-set. As @MyNameisMathilda said, it would be in my interests to protect my future after work.

My concern is that I don’t understand which way is best to have his pension, eg pension sharing or pension attachment, or more equity (he won’t agree to that anyway, he needs the cash) and the solicitor isn’t a pension expert so I’ll go to one of them once I have his CETV report.

The interesting turn of events this week is he’s mentioned spousal maintenance in a form. As I’m the higher earner, he believes he could go for this (he’s referenced his solicitor). From what I’m reading, he can’t - he doesn’t earn as much as me but it’s still a good/high wage he’s on (eg £55k vs £70k)

We’ve both worked f/t for years, my earning potential in the future is more open than his because he’s more capped in the public sector, but higher earning for me will mean sacrifices to work life balance so I’m capped more by choice. I don’t believe I should be topping up his earnings because he now hasn’t got the fiscal ability to fund the lifestyle he’s used to! (This is the person who decided to leave me for someone else by the way).

My concern is what his game plan putting spousal maintenance in his financial proposal? Dumbfound to be honest that he has the audacity to suggest it but it’s like that isn’t what he wants but it’s a tactic to scare me or suggest something else. I am waiting back on my solicitors advice as emailed them last night.

I wasn’t suggesting you take equity for pension

my point was often in here people say oh there us 100k in the house equity and my ex has 100k in pension pot so I’ll take the equity and you take the pension and that’s 50:50. But it’s not

re spousal he’s simply using that as bargaining - ie you go for more of my pension I’ll go for spousal. Whether you’d get more pension is questionable based as is whether he’d be awarded spousal - both could be an outcome although possibly low probability

but you need a proper pension valuation on his because cetv is not it

Ballpark figures his CETV will be £400k. Which sounds impressive, but if you're sharing and agree to do 50/50 on each pension, knowing that amount isn't particularly helpful. Were you together for the whole 20 years of his pension contributions? -- he could try to exclude pre-marital element of the pension (though probably won't work if a long marriage).

I can't comment on all points but

• the pension option to take is the one in which money is transferred from his pension into yours (I think called pension sharing) rather than receiving a monthly amount when he retires. The former gives a clean break and independence.

• spousal maintenance is a red herring bargaining chip and is nonsense, would never happen in your scenario. Just ignore it.

I am absolutely no expert ....

but if you agree 50:50 on both pensions I don't see how you can not end up with equality.

It doesn't matter what his cetv is. You split it on percentages, so ask for 50%. They take that and put it in a separate pension for you.

Same for yours.

Dunno .... maybe someone else can explain how that wouldn't be the right way to do it?

A CETV IS the proper pension valuation so I don't understand what you are saying?

The Cash Equivalent Transfer Value (CETV) is a capitalised value of a pension. This is normally requested for Divorce/Dissolution of a Civil Partnership, Financial or Transfer Out purposes. There are different forms to complete depending on the reason you need the CETV

I know you weren't suggesting that @millymollymoomoo your advice is brilliant as always (I've read some of your other posts). I think as you say, he's using the SM as a bargaining tool too. I just need the CETV so that I can enlist a pension management company to do a better report. It'll be a few more weeks I think.

@waterSpider he paid into the pension maybe 2-3 years prior to us getting together, but I didn't start my pension until 8 years after that due to climbing career ladder, having a child, maternity, a little part time work. I've built my pension up to what it is now in the last 9 years only (mixture of good investment choices and decent bonuses going into it, instead of taking the cash). He's been advised the pre-relationship aspect is a non-starter by our mediator, so don't think he'll go for that angle but who knows at the moment, he's behaving so strangely.

@TurkishClouds - I like the clean break option. It can just be moved and I can manage my own pension pot then. Thanks for replying, that's really helpful.

@ArcticSkewer I don't know if I'm confusing it because I thought it would be 50/50 but as Turkish and millymollymoo said, the SM is a red herring and I need to not worry.

You're all amazing. Thank you 💐

I do understand this advice @MyNameisMathilda because my solicitor has said the same "don't always trust the CETV". She told me to invest in another type of report (can't remember name of it now, but its a proper pension mgt company that do it). It'll cost £1500-£2000 but if the outcome is that the 'pot' is significantly more than the CETV, it's worth the investment. She referenced another client whereby the difference between CETV and this other report was over £100k in her favour.

I'm taking a % of pension so no need for the expensive report

@Emptyinsidetothecore we had this done when we got divorced. It is an actuarial report and it reviews all of your assets including the pension.

The Actuary's task is to consider what income returns are likely on the different pensions, taking into account the type of schemes that there are, target dates for retirement and the ages of the parties, and advise how the pensions in divorce can be shared to produce similar incomes.

There are actually 2 levels of this type of report - a more brief one and the full one which is the price quoted @Emptyinsidetothecore . You can decide which one you want usually dependent on the amounts involved but agree it is money well spent.