I have a really basic question relating to PSO''s that I can''t find the answer to on any of the MOD web sites.
If my former wife is granted a 100% PSO, can she expect to get the same pension as I currently receive each month?
My understanding of the process is that at the point of the PSO being made, a CETV is calculated and then a new pension is calculated using this figure and current annuity rates, which are likely to be considerably lower.
I''m still on good terms with my ex and would like to find an alternative to a PSO that maximises her income.
I don''t have an answer, but I thought a that the spouse would only recieve the pension at pension age, may be 55.
So I''m 40. x is 42. I was originally awarded a PSO of almost 30%. although this was good it was no good to me cos I get an income at 55. whereas I need a roof over my head today. The difference is that i assume you have left service so have spent your gratuity? whereas my x is on continuation so gets his gratuity when he actually leaves, so I traded.
Does she have a pension?
I don''t see how a judge can give away 100% and I also thought that if it was in payment then that''s a different ball game again.
Have you googled AFPS 75 (if your in that scheme) or AFPS 05 and read the booklet
"If my former wife is granted a 100% PSO, can she expect to get the same pension as I currently receive each month?"
I just want to say thank you for expressing this complicated issue so simply and succinctly.
I think the information you want is essential to negotiations on defined benefit pension sharing but I''ve never heard of it being made a requirement - it should be.
How much of the value - ie the guaranteed future income from the pension if left intact - is lost just by splitting a defined benefit pension?
It may be that it forms part of the standard actuary''s report for sharing a defined benefit pension on divorce where the newly split share has to or can remain within the scheme?
I''m still amazed at how little focus there is in the official information gathering - eg form E Form P - done for pension sharing on the huge difference between defined benefit and defined contribution pensions.
You could ask AFPS? - their record on pension sharing''s not good - I recall reading somewhere in the AFPS stuff online that they couldn''t predict the ultimate pension for a pension credit member - but things may have improved?
A lot of people would be keen to hear what they say.
Thanks Maggie for your comments. You make another good point....at the time of my divorce only CETV''s were taken into account when dividing assets, not what they would actually be worth in terms of income.
I''m actually trying to help my ex out here. I''m pretty sure that I''ve read somewhere that in a PSO situation they simply take a CETV at a point in time, take the awarded % of this, and then effectively buy a new annuity for the ex using current, commercial rates which are considerably lower that that being paid via the services pension. When I had the CETV calculated for my Form E it was around £130k, and my pension in payment at the time was around £10k a year. This same CETV of £130k would only buy an annuituty of around £6k a year now.
I can ask the AFPS but they want £180 to give me a new CETV and £90 to answer any questions. If they stated exactly how the process worked then we would all be better informed.
At the moment it looks as if I''ll continue receiving the pension and passing it straight onto me ex. She''ll have to buy a life insurance on me to cover the death aspect but she''ll still be much better off than going the PSO route.
My situation is similar, but different. My partner’s ex was awarded 50% PSO for his military pension that is already in payment. Only had CET figure which showed £280k. We assumed that she would receive £140k for herself as a PCM and would then get approx half of what he already receives.
I don''t think this is how it''s done. She will get 50% of the ''fund'' and your partners pension will be reduced by 50%, but I''m pretty sure her half is then used to provide a new PCM (pension credit member) pension based around what current commercial rates would provide for this fund value rather than 50% of what your partner currently receives. This will be considerably less.
I''m trying to get confirmation of how exactly the PCM''s pension is worked out and will post it as soon as I have anything.