It another pensions thread

[HangerLaneGyratorySystem]

So I've got a small pension from my previous employer, a Large Bank where I worked many years ago. The pension is index linked and I currently get about £240 a month before tax (age 60 still working as well). I told them I needed a CETV for divorce, but Large Bank have told me they will only offer me an actuarial CETV, and that there is a flat rate charge of £1,000. I think that's outrageous; its not a sliding scale either so if someone had worked for Large Bank head office in a senior role for 30 years - can't imagine how much they'd get but it would be a hefty pension - say £3k a month or something, then they'd pay £1k as well.

But really my question is surely charges should be relative to the work involved, and if I don't need (or even want) a full actuarial report (for such a relatively small pension) then why are they saying its that or nothing - just so they can charge the £1k fee for Large Bank's benefit?! Anyone else had this experience?

A 3rd party Pension Actuaries will be used to calculate the CETV - that’s what you are paying for. That persons time, experience & expertise. It doesn’t matter if it’s a large or small pot - the work involved is the same.

Working out your CETV is a complex process involving many factors.

As well as considering how much you and your employer contributed, they look at how long you contributed for, it’s also based on personal and social factors.

These include:

• Your age
• The scheme’s retirement age
• Life expectancy
• The cost of living

But @NorthernSpirit if you look on the (many) threads here about pensions, people talk about getting a CETV or an actuary report, they're not necessarily the same thing surely? My solicitor and mediators said to get one or the other, the CETV being cheapest (that's what I was told). I've already had a quote for an actuary valuation for both mine and my STBexH's civil service pension of £2k for both - so that was a bargain then?

It sounds like you're already in receipt of the pension so that makes it's a more complex entity (hence the charges). I do pension admin Albeit not divorce, but I know we can offer a free calc to members not in payment as we can do it ourselves but as pp said pensioners need actuarial calculation which costs a lot. Check the implementation charges too as they are also often much higher for pensions in payment because of the extra work needed to implement an order

You're right @LG93 I've been receiving this pension for 2 years now.

Thank you both for information though, I do appreciate it.

I don't know whether this will be help or is relevant to you but I have just received a CEV for my small final salary pension of £2,500/year which I have been receiving for two years. The valuation was free and the calculation used was £2,500 x 20 = £50,000. I hope this helps.

I dont wish to be pedantic, but that's the value for testing against the lifetime allowance (LTA) and isn't the same as a value for transfer/divorce purposes (CETV). A CETV would need to be a best estimate of what it would cost to purchase equivalent benefits on the open market - This varies hugely month to month and between individuals depending on their circumstances and market conditions and is definitely not as straight forward as multiplying by 20, unfortunately.

Just thought I'd mention in case anyone visits this in the future and gets in a muddle! 😊

I am sure you are correct as I am certainly no pension expert but as OP is already drawing a similar £ pension to me I just thought it was worth mentioning. My valuation letter reads "As you are a pensioner, the calculation is based on your current pension in payment (which amounts
to £2,500 a year). It is important to note the transfer value quoted is a very rough calculation (20 x pension) for divorce purposes only and is not guaranteed. If you would like an accurate quotation, I will need to ask the Plan Actuary to calculate the transfer value, and this will incur a cost of £340 plus VAT"

For a pension of this size I didn't think it was worth the extra cost and may or may not make much difference to the value.

Thank you @skyfullofstars123 - I think there is an almost identical calculation on Advice Now (pinned by MNHQ) so what you say makes sense to me. Its such a very small amount of money I don't think its going to be an issue.