I am not an actuary but have to confess that I am a director of Bradshaw Dixon & Moore Ltd, the firm that Maggie referred to in her earlier post. The firm that hosts our website (which claims to be “The world’s No.1 web host”) has suffered major technical problems with one of its servers, which is why you and many of our clients have been unable to access parts of our web site over the last day or so. Anyway, that is enough of the excuses.
I shall try to answer the points that you raise in the hope that it might help.
You refer to a CETV
, which stands for Cash Equivalent Transfer Value. This is the normal valuation that lawyers and a court will start with, because it is available from the pension scheme. However, when as in your case, the pension is in payment the valuation required is a CEB, which stands for Cash Equivalent Benefit. Effectively the Court is endeavouring to place a cash value on your pension, which is why an actuarial report has been requested. The actuary will be asked to calculate the value of your pension income in terms of a cash lump sum.
JLGsDad is correct and potentially very helpful to you in saying that the pension is worth less (to you) because you would be expected to die earlier than someone in receipt of the same pension who did not retire early due to ill health (sorry to be so morbid). To make place a fair and reasonable value on your pension, in my opinion it is essential that the valuation include an assessment of your heath and the effect this may have on your future life expectancy. This means that the actuary making the valuation must have access to appropriate expertise and not all will have.
To put it rather crudely and bluntly, the value of your pension will be lower the more impaired your life expectancy is. From a purely financial perspective, your advisors should be able to use this to ensure that any settlement is as fair for you as it can be. An assessment of your life expectancy does require proper consideration and it would be incorrect to link disability directly with a lower life expectancy. For example, if I were to lose a limb because of an injury I would become relatively disabled but my life expectancy would be unaltered.
Had you been able to download the forms from our website you would have seen the one-page questionnaire we use for making simple initial assessments of life expectancy from a medical perspective. In my opinion, it may be necessary to make a more specific assessment in your case and this would involve obtaining medical reports. These would typically take the form of a report from your own GP and if necessary a physical examination (probably also by your GP). These reports can be expensive and I would suggest that the expense could be disproportionate in your case. Your GP could charge around £80 to provide a report from your medical records and an examination could cost a further £100. However, there are ways to reduce these costs and the firm making your assessment should be able to offer you advice and assistance in this regard.
The assessment itself will form part of the actuarial valuation of your pension. The valuation itself will be quite expensive and the additional cost of the life expectancy assessment (excluding the cost of any medical reports) should be relatively small.
Our phone number and contact email addresses are on our website and if you would care to contact us, I would be happy to arrange for our forms to be emailed to you.
I am happy to assist you where I can by answering questions through this forum. Some of these matters are quite personal, so I am also happy to assist with information if you email me using one of the addresses on our website. If you do contact me direct, we will not be charging for the information. Please do not be concerned that you could accidentally run up a bill with us. That will not happen.
I hope that this helps.