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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.

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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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help! pension cetv

  • Peter@BDM
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24 Nov 07 #7593 by Peter@BDM
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SK_Max. I am happy to help through this forum, particularly where the issues may be of general interest. One of the things I must avoid is giving advice, the other is possibly causing offence. I will definitely not do the first and will do my best to avoid giving offence.

Avoiding causing offence may be difficult in this case, as the issue concerns personal health and longevity – how long you may or may not draw your pension. I can give information about pension values but not what a court might do about splitting offsetting and attaching pensions.

Your health may well be an important factor when your pension is dealt with, but just how this plays out depends on what proposals are being made. You say that the sharing of the assets is “signed, sealed and delivered”, from which I take it that the pension is being looked at separately, which limits some of the options.

Pension values and health happens to be something that a colleague of mine wrote an article on recently. It was published last week in Family Law Week at www.familylawweek.co.uk/library.asp?i=3247. Can I suggest that you have a look, as it may reduce the need for long and boring posts from me. Once you have waded through the article, if you could come back and post a couple of specific questions (as a starter) I’ll try to help.

By the way, where the legal case is being heard is important, as the law in Scotland is different to that for the rest of the UK. In very broad terms, in Scotland, only the pension built up during the marriage or civil partnership is taken into account.

  • Gilly
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07 Dec 07 #8618 by Gilly
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SK,
i'm also in receipt of a Forces pension therefore look on it as you do as an income stream and not a pension pot per se.Recently gone through financial mediation and had to obtain CETV of current scheme and Forces one - and according to AFPA my services pension has NO CETV as its in payment.

As an income it increases my liability for child maintenance but is not a substantial financial asset that it would if it had a CETV.

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07 Dec 07 #8621 by Peter@BDM
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Gilly
The AFPA are not being very helpful to you I am afraid and you might not find that the Court is very sympathetic.

If a pension is not in payment, the valuation provided by the scheme is a Cash Equivalent Transfer Value (CETV), because in some cases you can actually transfer the value to another pension arrangement (… Transfer Value).

Once a pension is in payment, there are a lot more restrictions on what can and cannot be done with it, so it does not have a Transfer Value as such. The pension can (and the court will probably say should) be valued by the scheme/pensions agency. The appropriate valuation is a Cash Equivalent Benefit or CEB. It is not very helpful of the agency just to say that your pension has no CETV, although technically correct, it would have been more helpful if they had asked you whether you require a CEB.

I hope that this helps.

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07 Dec 07 #8650 by Gilly
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Peter,
thanks for the that info. As things stand it being in payment brings my wages up to near parity with stbx.She's earning over £30k. She always undervalued her own pension due to working in private healthcare but her current pot has accumulated to £75k. We've agreed a split of equity and agreed to disregard each others pensions. My current pension, only being in post 4 yrs, is only £18k anyway. If she wants half of that I'll willingly take half of hers! Equity will be split 35/65 so she's able to keep FMH.

Thats the plan anyway.......failing that I'l buy a canoe!!Panama here I come....

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07 Dec 07 #8654 by TMax
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Ive been in touch with my pensions dept Glasg and they say they have never heard of a CEB but will endevoour to find out, I have also asked others about it they give me that blank exression heheh. makes me think how many retired forces personell have only ever had CETV done on thier pensions and may of lost out because of getting a higher rate set against them. does a CETV make any difference against a CEB into what the person who has the pension can keep. specialy like mine where it pays my mortgage and insurances only with verly little left for houseold expenses ie gas-food-Ctax,-water-elec. No luxuries.

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07 Dec 07 #8655 by TMax
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Hi peter in reply to this one, not my post of a moment ago, X actualy has signed in front of her own soliciters for the agreed sum which she has taken and spent not to claim anything including pension in that settlement

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08 Dec 07 #8668 by Peter@BDM
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SK.Callum
In response to your question about whether the wrong value has been quoted. It certainly has happened and I think that the Martin-Dye case was one in point. I seem to remember that at one stage the Judge remarked that the scheme had quoted a CETV rather than a CEB and no one had spotted the error.

Schemes are very used to quoting CETVs (which is why they are used in divorce and dissolution cases), even though they are not a fair value [don’t get me started on that hobbyhorse again]. As far as I know, CEBs are exclusive to divorce and dissolution, which is why they are not so commonly known about. Generally, I would expect a CEB to be a lower value than a CETV, so if the wrong number really has been used in any particular case, the effect would depend on what action was taken – offsetting, attachment, sharing.

If an attachment or sharing order is made, then the “error” should be spotted when they come to implement it. If the order is a 50/50 split then no harm will result. However, if the pension value is offset against some other asset, then it could go un-noticed.

As pensions are such a boring and potentially complex area, some lawyers do not have a detailed knowledge of the subject. I suspect that consequently, the term CETV is sometimes used to mean a CETV or CEB. This really doesn’t matter, if the scheme has quoted the right number (CEB or CETV) in the first place. So, people should not be unnecessarily alarmed if they think that the wrong value was used, it may just be the title that is wrong.

Ideally, the lawyer will get independent expert advice if they are unsure (from a suitable IFA), but in many cases, the additional expense is difficult to justify.

P.S. It seems that your case is being settled to your satisfaction – I very pleased to hear it.

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