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?

yes, but if you plan to ask for 50% of it and also give him 50% of yours, it really doesn't matter what it is worth?

Say it's worth £400k and you ask for 50%, that's what you get half of.

Just because someone else values it at £450k you are still getting 50% of the same pension.

You'd only need the report if you were going to say, I'll take the house (worth £250k) and you keep your pension (so is half worth £200k or £250k)

Just my understanding of it!

Pension sharing.
Pension attachment orders are incredibly rare and won't give you clean break.

You need to know the cetv of all pensions and you will probably need an actuary report

Actuary Report, that’s it. My brain is mush. Thanks @MyNameisMathilda

It’s all so confusing.

Based on what @ArcticSkewer is saying, I don't need the actuary report but surely if half of one figure (from CETV) and half of another figure (actuary) will be different therefore I’m still better off getting it? Or have I misunderstood.

And you wouldn't give him 50% of yours and take 50% of his because of the costs of pension sharing involved. You add them together and divide by 2 but you need an actuary report to tell you the %

Ok the costs part makes sense (although mine cost the same as an actuary report anyway!)

Is there any other reason why you need an actuary report when just planning a 50:50 split of pensions?

As i posted earlier here 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

That makes sense to me. Thank you.

Cetv vsluations on final salary defined benefit schemes often tend to be quite inaccurate hence why I’d suggest a proper valuation by pensions or financial advisor

op doesn’t have to do so of course and depends on size and values of funds in question

I don't know why you are saying this. It's a bit confusing as with a final salary defined benefit scheme (as my ex H had) the pension company itself dealing with it gave the value of the CETV - they know how much is in it at the time of asking. They are the only people who know. When you are dividing this they will then transfer the 50% or whatever at the value of the CETV at that point which is dependent on market factors eg we got a CETV estimate which was x amount in one year but by the time it was enacted it was worth a different amount due to markets and world economic conditions. My ex continues to get his monthly pension on half of his pension now at a fixed rate whereas my share went into investment and is now gaining value which affords me a pension and will pass onto my children. His will die with him.

Saying it because it’s correct but op can do her own research to validate this

If you wanted a CETV of your company pension who would you write to?

Absolutely correct.
CETVs can be wildly inaccurate especially if a government pension.
If you split pension 50% you may actually get more or less than you are entitled to hence the recommendation to get an actuary report - they are the pension experts. And if the mediator is dismissing the idea then you need a different mediator.

The CETV is something that you request from your company. The value of your CETV will depend on a variety of factors such as the size of your scheme, the amount of contributions you have made, the amount of benefits you are entitled to, your age, and interest rates, etc. The CETV is the amount of cash the member can receive in exchange for the transfer of these pension rights.

Yes - when it comes to taking it then it may be more or less than that quoted on the original CETV.

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. The Actuary does not get you a higher CETV.

No one is saying it definitely gets you a higher CETV but in some cases it absolutely will. Government pensions are always undervalued.
An actuary report will accurately calculate the CETV and sometimes this can be a lot higher.

and are you saying that the actuary can challenge your company pension provider to cough up a higher amount?

No one is saying they will be forced to cough up a higher amount.

The actuary will tell you what % of pension you should receive to get equality of income or value at retirement age.

You then get a pension sharing order to whatever % it is. The pension co then implement it once absolute has been granted.

But the pension company will take the % of what they are told and put that in a pot under your name.

In this case, you have two different sorts of pensions. A final salary, civil service, police, army etc type of pension needs a more detailed assessment by an actuary.

A regular pension that you have contributed to can be valued more simply using a CETV. That's because they will look at what is in the pot at a particular date.

The final salary pensions or civil service etc type might be index linked, have different provisions and their valuation at a particular point in time is harder.

That is exactly what I have been saying from the start.

An actuary report will accurately calculate the CETV and sometimes this can be a lot higher

I think it was this that caused my confusion with your post. Anyway we do seem to be singing from the same hymn sheet.

I do know what I'm talking about

Sorry if I caused confusion.

You wouldn’t transfer 50% of one pension and 50% of the other. You’d have both valued and then one would revive a % of the other’s to equalise pensions in retirement. This depends not only on the CETV but your age and maybe some other factors too. A government pension can easily be worth double the CETV and also a judge may well ask for the report. It takes a while to produce the report. It’s best to just get one. We used Lumin Pension Services who were reasonably priced and quicker than what we were quoted by many others.

My solicitor advised these people www.collinspensionactuaries.co.uk

Unless you’re planning on offsetting pensions versus equity and cash now, then I don’t really see the value in having an actuary prepare a report. It would only be worth it in a high value, financially complex case. Or, are you considering offsetting pensions against each other so only one of your pensions becomes subject to a pension sharing order?

If he’s a member of a defined benefit pension scheme in the public sector then all his CETV is going to do is climb even higher as the months go by and his level of service increases. It is most likely protected from inflation and so the growth from that alone given how high inflation is at the moment, will mean it will be increasing at a considerable rate.

The CETV for pensions allows you to compare apples with apples. Unlike a defined contribution scheme, where the CETVs for most will have decreased because of the current economic climate, the CETV on a defined benefit public sector scheme will not have done.

Whilst I’m not a pensions expert, nor a lawyer, I would recommend trying to achieve a clean break. Having a pension sharing order will enable you to do that.

A clean break is the best thing to do but I would maintain that anyone with decent pensions needs an evaluation of them by an actuary. It is a small cost compared to the potential gain and it should be spicy by both parties. Offsetting a pension for cash and equity is not a sensible move.

Thanks @Timeforachange2023 that’s really useful to read. No plans to off set it for cash as I have savings and equity, so happy for pensions to be just split and in a pension to draw down when I retire.

To answer your question, yes to off setting just one pension (his, because mines definitely less).

To simplify this, say for example, mine is £100k and his is £400k, that’s £500k, so 50% each is £250k each. I keep my £100k and not touch that and he then owes me £150k of his, which will sit separately to his in my name, which I can keep there or more it into mine if I wish (I’d get financial advice at that stage). I know it’s more complex than that, but am I right in thinking that’s how it works as a pension sharing order?