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What are we each entitled to in our divorce settlement?

What does the law say about how to split the house, how to share pensions and other assets, and how much maintenance is payable.

What steps can we take to reach a fair agreement?

The four basic steps to reaching an agreement on divorce finances are: disclosure, getting advice, negotiating and implementing a Consent Order.

What is a Consent Order and why do we need one?

A Consent Order is a legally binding document that finalises a divorcing couple's agreement on property, pensions and other assets.


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ACTUARY REPORT

  • howier
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08 Nov 07 #6172 by howier
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Just wondered in Peter@BDM still on the site or even an Actuary?
Just a little more info re Actuary report, the report is to be completed on my military pension but will the report also take into consideration x2b SERP's and if so is it likely to make a big difference! I appreaciate too that I also get state pension but mine is drastically reduced is that correct?
Getting used to the idea that I will lose some of my pension but now trying to get an idea of how much (considering offer PSO to x2b but unsure of %)
Thanks

  • maggie
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09 Nov 07 #6215 by maggie
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howier - if you find out how the percentage of the CETV /CEB is decided in pension sharing please PLEASE publish your findings on here
As an ex-wife I have done final salary pension[not in payment] sharing and I'm damned if I understand how my % was arrived at.
Is it treated as capital so the un/less-pensioned spouse gets whatever % brings the capital split to 50/50 or something fairer - or is it about what % will meet the income needs of the un/less pensioned spouse to avoid spousal maintenance/ assist Clean Break?
Finding out the income a pension share will produce at the time you're negotiating the percentage seems to be well nigh impossible.

  • Louise11
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09 Nov 07 #6219 by Louise11
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Maggie and Howier

In my Husbands case this is how it was worked out.

They (his former wifes solicitors that is) got a Actuaries report done on my Husbands pension. (His ex wife was demanding a share) The actuary estimated its worth today at 400k? His CETV was actually 320k. (Dont ask me why, still cant work it out, but its something to do with lost benefits ect ect) Anyway they can value it at what they like 1 million pounds if they like because the truth is its split by percentages, so what ever % they award it will be at the date of hearing and the Pension fund will take that % from whatever THEY say its worth)
The best way of explaining it is you add, together all the CETVs

so say Husband CETV is 100k
Wifes CETV is 10k
this = 110k

If equal share of 50% =55k

So wifes needs 45k of husbands pension as her shortfall.
Now you have to work out what percentage is 45k of husbands 100k.

But and heres the but.........it all depends on what the courts think that share should be. So if there are no ther assets to share, a wife could probably get a bigger percentage of the pension, it all depends on how young you both are ect ect.
I hope this explains it a bit better.

Kind ones
Louise

Oh and P.S. According to his former wifes solicitors and their pension report into my husbands fund, they were fighting for 75/80% of his pension, we offered 50%, at the FDR, it was refused! At the Final Hearing, it was clear if they didnt come to some agreement outside court the Judge indicated if she were to make a ruling in the FH when they go back in, then the award was going to be around 28%. The ex wife settled at the door of the court for 30% but be warned it cost her 30k to get to that FH, my husband represented himself and it cost him nothing! But she had left and they had been divorced for 5 years before this pension share was finally implimented! I suppose had they of done it five years previously she would of got her 50% or more.

  • financial planner
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09 Nov 07 #6249 by financial planner
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Maggie and Howier there is no right answer on how pensions should be shared - the courts only use the CETV (cash equivalent) as it was the best they could come up with. The issue is what do you want to achieve - if it is 50/50 split of pension income a 50/50 split of the CETV is unlikely to achieve that as women live longer, may not be eligible to join the main scheme in their own right so obtaining a replacement pension on the open market may be more expensive etc.
The best way is to agree what share of the pension income earned to the date of divorce you wish to achieve and get someone to calculate what share of the CETV would provide that - an actuary is handy to know at this point especially if there is a final salary involved.

In some parts of the country the district judges are known for just splitting the CETV and not being interested in the income each party will receive in retirement - so if you can agree between yourselves then all the better.

  • maggie
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09 Nov 07 #6260 by maggie
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Another hidden postcode trap - some judges "don't do" lifetime spousal maintenance - some insist on it - some only look at the pension CETV and not the income from a shared pension.
My DJ had no idea what my income from a pension share would be because my solicitor failed to demand information on what the scheme membership I was offered actually meant- but the DJ happily did away with lifetime spousal maintenance without knowing if the income from my pension share would support me when maintenance ceased.

  • howier
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12 Nov 07 #6438 by howier
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Thank you everyone.
I still would like if anyone knows is the State Earnings Related Pension still taken into consideration as a matter of course by Actuary or should I request that this is included on the instruction letter to actuary?

  • Peter@BDM
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12 Nov 07 #6442 by Peter@BDM
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Howier. The simple answer is that the actuary will report on what the instruction says. If you want specific pensions, such as State Earnings Related Pension to be taken into account, you must ensure that this is specified in the instruction to the actuary.

If the instruction does not specifically include State Earnings Related Pension – SERPS (or State Second Pension – S2P – as it is now called) it will probably not be taken into account. There are two reasons for this. Firstly, it is not for the actuary to presume what the Court had in mind (and had already taken into account) when giving the instruction. (In this respect SERPS/S2P is no different to any other pension, or any other source of income, the actuary would not be expected to investigate and take into account any other pensions or income unless instructed to do so). Secondly, each additional calculation adds to the cost of the report and professionally it would be wrong to incur such additional costs without good reason.

There are some other issues around this sort of point. For example, in compiling the report, the actuary may become aware of facts that would not otherwise come to the attention of the Court and the two parties in the divorce/dissolution. In this case, the actuary has a professional duty to make such issues clear in the report. An example of this is where a pension sharing order (PSO) is under consideration and the actuary is asked to do equalisation calculations. There is an obligation upon the actuary to research how the pension scheme will implement and resulting pension sharing order. If, as can sometimes be the case, the PSO would have unexpected implications, the actuary is obliged to report upon these.

Sorry, that this is as ever quite a long and complicated reply, but these things are not always as straight forward as they may at first appear.

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