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actuary analysis

  • ALEXANDER's Avatar Posted by
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28 Jan 08 #12208 by ALEXANDER
Topic started by ALEXANDER
in mediation..husband says its not necessary to get an actuaries assessment..he has 4 pensions worth ctev of about £330,000...is there any guidance as to when an actuaries report is partic worthwhile..pensions are with Zurich..private not civil service/ army.

  • TMax
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29 Jan 08 #12213 by TMax
Reply from TMax
here are some of the discussions already been through on pensions www.wikivorce.com/divorce/Divorce-Forum/Pensions/

  • doodles
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29 Jan 08 #12233 by doodles
Reply from doodles
so what is exactly an actuaries analysis?.my ex to be has a big pension and is very knowlegeable and manipulative so any info on how to get the best deal from his pension would be appreciated. he earns 75k and puts extra funding in whulst i earn 21k and also put extra in mine. thanx. mines worth bout 22k but how can i find the value of his as he never sends the legitimate papaerwork from the pensions, just writes something out himself.

  • Peter@BDM
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29 Jan 08 #12256 by Peter@BDM
Reply from Peter@BDM
If I may offer some information that may help you. The issue with CETVs is that they tend to undervalue a pension. Please excuse the fob-off but there are technical reasons for this and I won’t bore you about them here. I can point you in the right direction if you want to investigate further.

The problem does not apply to all pensions; some are more susceptible than others are. For this purpose, you can split the types of pension into two. The first are called money-purchase or defined contribution pensions. Stakeholder and personal pensions are of this type. Many large employers are moving into this type of scheme as they generally cheaper. CETVs on these schemes are not an issue in terms of the fairness or appropriateness of the CETV.

Type two are defined benefit pension, sometimes called final salary. This is where the pension promise is to provide a specified pension upon retirement. As a generalisation, public sector schemes (NHS, Local Government, Police etc) are all this type of scheme. Many employers, particularly the bigger ones, also have this type of scheme.

CETVs on defined benefit schemes can significantly under value the pension. The differences can range from 10% upwards. Public sector pensions tend to be a problem, and those in the uniformed services (police, armed services etc) produce the biggest differences.

As your husband’s pension is with Zurich, it is most likely to be a money purchase pension and therefore not a big issue. You or your lawyer should be able to confirm this quite easily. The only other thing to watch out for is significant surrender penalties that can inappropriately depress the valuation. These are most likely to be encountered if the pension is invested in a with-profits fund. Again, your lawyer should be able to establish whether this is an issue, if not s/he can easily get assistance from other professionals and this should not cost much at all.

  • Peter@BDM
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29 Jan 08 #12257 by Peter@BDM
Reply from Peter@BDM
My response to Alexander may help a little.

The legal issues are not my area but I suspect that this will depend upon whether you institute ancillary relief proceedings. If you do, then the information must be provided on form E, it including a valuation of the pension provided by the scheme.

If the value of the pension(s) becomes an issue it may be necessary to obtain an independent valuation. To value a defined benefit pension actuarial principles must be applied. That is not to say that the valuation must be done by an actuary, but it usually will be. Valuation of the pension will be central to this sort of report but it may cover various other aspects of the pension(s), such as the effects of taking various actions – sharing, offsetting etc.

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