Hoping someone clever can give me a bit of advice on something that is really confusing me. Been to First Appointment and the Judge ordered a pension report on my police pension and my stbx''s teachers pension. The CETVs that we got show mine is worth about double hers although hers was hugely out of date and she has made no effort to get it updated. STBX is a couple of years younger than me and her salary overtook mine some time ago so come retirement her pension will be greater than mine. There have been quite a few posts on this site about police pensions being fantastic and CETV massively undervaluing them. I understand that this is because we (used to) retire at 55 and that fact is worth a lot of money.
However, since our court hearing the Home Secretary has announced that the police pension scheme is being closed in 2015 and we will join a new pension scheme with a retirement age of 60. So the factor that makes the police pension so ''great'' is no more. By my calculations I will have to work an extra 4-5 years to get a full pension (59 years old) although the finer details of the scheme are still being negotiated.
My concern now is that we are paying for an actuary to value a pension that has a very uncertain future. The pension will be massively overvalued because of the 55 retirement age which is now false. It''s not as if I can supply details of the new scheme to the actuary because they are not fully agreed yet. It seems to me the safest way to value it is the CETV which is a snapshot of what it is worth today in cash terms, which is what we already have. Has anybody got a better understanding of these things that can offer some advice please?
Firstly, on the issue of the proposed changes, these only affect benefits accruing in the future and further, there is likely to be an element of phasing in of changes.
Leaving that all to the side, the most important issue is the isntructions which the actuary is given. If he/she is instructed to value your pension on the assumption that you retire at 50 then this will result in the value of your pension being significantly higher than your wife''s. Where I am asked to consider value of policde pension or the impact of applying a pension share against a police pension then the first thing I do is ensure that both parties understand the significance of the assumed retirment age and I push towards providing figures based on at least two alternative assumed age of retirement so that both parties understand how significant this assumption is.
My NHS pension was calculated last year when I was 52. The value is nearly 290,000. Does this mean this value is inflated because it was calculated at that age? Assuming I won''t retire until I''m 65 at least given the circumstances forced on me, does that mean my pension is worth less or more?
Sorry if I''m a bit thick but I am really struggling to understand what it is actually worth in real terms as far as the financial ''pot'' is concerned.