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Actuarial report offsetting calculation

  • Firstandlasttimer
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  • Junior Member
10 Jul 21 #517234 by Firstandlasttimer
Topic started by Firstandlasttimer
My partner was married for 19 years, co-habited for 10, two children, both school age and living with STBX. The divorce is incredibly acrimonious; he is a LIP whilst the STBX is represented with Legal Aid for reasons unknown

At the FDR, the judge recommended a joint actuarial pension report due to husband having a Civil Service pension which always makes things tricky. The consultants have provided a report and it makes sense for the most part but we don't understand the offsetting calculation.

STBX has flip-flopped between wanting to stay in the FMH until the children are 18 and wanting to buy her own place with the latter being the latest position. But in order to do this she will need the lions share of the equity as she is on a low income and has lower mortgage raising capacity. This is perfectly reasonable and as a needs case the children should have somewhere stable to live, but my understanding is that should she take 80-90% of the equity, this should also be reflected in the amount of pension she should get, hence the provision of an offsetting calculation.

The report states:

Capital offset for each 1% pension share order:
Using the guaranteed income solution each 1% represents £2,739.77 of capital offset
Using the flexible income solution each 1% represents £1,658.19 of capital offset

It then also give the pension share for each £10,000 of capital offset - the other side of the calculation.

We know she will be using the capital (equity from the house) to purchase another property and therefore will not be investing in an annuity insurance or providing a guaranteed income after pensionable age, so which calculation should be used to make a reasonable offer to reduce the amount of pension received in lieu of a greater share of the marital capital?

As unpleasant as the whole two year process has been, my only interest is in supporting my partner and hopefully helping him reach an equitable resolution of the financial matters so any help would be gratefully received.

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