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totally confused

  • hostee
  • hostee's Avatar Posted by
  • Senior Member
  • Senior Member
20 Feb 08 #14493 by hostee
Topic started by hostee
I know i will need an actuary or IFA to sort this out but right now i cant afford one, so can anyone here shine a light on my issue. Transfer values of pensions what relevance does this figure have on the payments of the pension at retirement? For eg, his transfer value now is £200,000K mine is £50,000k we both have another 20 yrs approx b4 retirement, i have been told his pension on retirement will be around £65,000pa by a retired Captain based on slight rules changes and more years in service needed, i dont know what mine will be probably about the cost of a loaf of bread. Im trying to sort this in my own head what figure after 14 yrs together 10 yrs married and 3 kids with a decent equity in the home I can be looking to achieve to get myself a home with the children and be financially ok.
any help gretaly receieved.

  • maggie
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  • Platinum Member
  • Platinum Member
21 Feb 08 #14581 by maggie
Reply from maggie
In my case -sharing a deferred final salary pension - there seemed to be no link at all between the CETV and the pension based on final salary .
The CETV calculated by the scheme was £325,000; the pension in 2014 was guaranteed to be £25,000 a year index-linked - we had a statement of preserved benefits saying so.
Outside the scheme the CETV of £325,000 would only buy an annuity pension of £12,000 a year.I thought the idea of the transfer value was to give you enough cash to get the same pension income and benefits outside the final salary scheme. Green as grass.
I was offered scheme membership if I wanted it in letters and Form P - so no worries - whatever % I get will be that % of £25,000 at my age 60 in 2007 - won't it?
[No it won't]
When they got the pension sharing Order the trustees told me I had to transfer out and halved the value of my pension.
Avoid the traps - don't agree to share until you know what the two new pensions would look like; for a CETV valuation by someone objective or maybe even on your side I can't see any real alternative to an actuary - but having gone through it I would now be aware as spouse I do have rights to information on how the scheme would deal with my pension share and what benefits I would get
it's not clear in the legislation or Form P what that means exactly - so I'd say as a minimum I'd want to know whether my share could stay in the scheme and if so how it would grow - when could I take the pension and how that pension would be calculated when the time came.
Be aware that the rules applying to ex-spouse pension credit members will more than likely be different from rules for members - regard it as an entirely different pension with rules you have to find out about

  • Peter@BDM
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21 Feb 08 #14676 by Peter@BDM
Reply from Peter@BDM
Stick with it, things will get easier. His pension is likely to be worth a lot of money. Transfer values are what they say on the tin, but how many of us read all that is written on tins?

The pension scheme will quote a Cash Equivalent Transfer Value (CETV), this is the starting point and the figure the court will require. However, it is a very misleading number and typically understates the true value of the pension by a significant amount. It is merely the amount of money that your/his pension scheme would hand over to another pension scheme if you left the scheme and transferred to another one. Theoretically, it is the value that the scheme is currently holding against the pension promise that has been made to date. This is based on your/his service to date and ignores future service. However, that is only the theory.

Putting two-and-two together and making roughly four (can you tell that I’m not an actuary?), my guess that you and he have aviation connections. Assuming that this is civil aviation, you are both likely to be in good pension schemes. As he is a Captain, it is possible that the scheme has special features, which recognise the strict medical requirements for airline pilots, and that this means they often have to retire early. If this is the case, the CETV will very significantly understate the value of his pension.

You could well need an actuary or an IFA to help sort this out at some point, but your lawyer should be able to get him to pay half of the costs of doing so, particularly as the pensions are likely to be quite complicated. See what your lawyer says first and don’t go spending money on actuaries or IFAs until you really need to.

  • hostee
  • hostee's Avatar Posted by
  • Senior Member
  • Senior Member
22 Feb 08 #14709 by hostee
Reply from hostee
Thanks BDM, Yes we are both in the airline industry and he has now uped his retirement age to 65,I have managed to get hold of the pilots pension calculator which although im blonde I did manage to work out he should get a pension of around £75,000 pa he also has AVCs which i dont have the detials of yet? I also asked a few CApts retired and in service and this seems fairly accurate. I really wish I was clued up on this stuff now, he has informed me yesterday as of JUne he is going to get a mortgage holiday to reduce the equity in the FMH until its sold, i did call the mortgage provider who say he cant do that without my signature as im also on the mortgage, and in the court order he has been orderd to pay it ..... idle threats i feel, but it keeps me awake every night.
thanks for listening

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