Final salary pension scheme share

On a concurrent thread Divorce IFA has said
"So if a pension share of 50% equates to a £10,000 per annum internal pension to the ex spouse this is what is promised and must be delivered (scheme funding issues aside)"
So in this case - how can the spouse be sure that 50% of the CETV will net 50% of the pension income as it stands at the date of divorce?
What to check for before negotiating the share ?
- I was offered scheme membership in letters from the trustees disclosed at the FDR - but they still asked me to transfer out when they got the pension sharing Order and only on appeal did they magnanimously offer membership of the AVC section - not the defined benefit section.
How can you be sure at the negotiating stage that you will ultimately be offered membership on a defined benefit basis?
There seems to be nothing to stop the trustees changing their minds?

From your experience it is clear that you cannot totally be sure but I have not come across a similar situation.

As Peter has pointed out the CETV is shared and then the value is usually then applied to defined benefits based on the spouse's age etc. I assume here that the internal transfer results in defined benefits.

Clearly, in the case of your pension share, the trustees got cold feet and decided that shadow membership on a DB basis was not for them and offered an internal transfer on a money purchase basis.

I can quite imagine the anger this has caused you.

The trustees usually publish what their policy is on divorce and this can usually be relied upon.


Regards

Phil

Please note: Although I am a Resolution Accredited Independent Financial Adviser my comments are given here as general guidance ­­­­­­­­base­­­­­­­­d on the (often limited) information available and does not constitute financial advice. They should not be seen as a substitute for detailed financial and legal advice.

Many thanks for all the replies and useful advice I have received to my questions on final salary pension scheme. I have only recently discovered Wikivorce and hadn't expected such a response.

I now realise I should definitely seek the advice of an IFA before agreeing a 50:50 share and whether or not to opt out of my husband's current scheme.

Ivy

Make sure the IFA is Resolution trained for divorce Ivy -
but for reasons best known to Resolution last time I checked they're not listed on the Resolution solicitors' website nor the IFA pro. body website. You sometimes find them listed on Collaborative Law websites - otherwise you seem to have to ask a solicitor .............kerching.

Maggie,

Why bother going to all that aggravation when there are high quality Resolution accredited IFAs that are posting here on Wiki?

Peter

Maggie's point about what you actually get from a scheme is one worth bearing in mind. Remember that the divorce is between husband and wife. The pension scheme aren't a party to the divorce, and they are not bound by any discussions between the two sides. They are only bound to do what is set out in the Pension Sharing Annex to the final order, and then only to the extent that the law provides. This may not be what either the husband or the wife expected or understood!!

Just because both H & W (and more probably, their solicitors: and not all solicitors are at all comfortable with pensions as a subject generally...)assume something will happen doesn't necessarily mean it will. Did they both check with the relevant pension scheme?

Pension scheme trustees see their role as looking after the scheme as a whole, they are under no duty to be generous to either side in a divorce. They aren't responsible for putting right any mistaken assumptions or misunderstandings. And within the rules, which don't really protect the divorcing spouses very much, a trustee can be as mean as they like...

I'm not saying all pension trustees are out to get you, but it is safer to assume they won't do you any favours, and to check very very carefully what the scheme says will actually happen, not just assuming, or even relying on what the other spouse says. Too many people assume that the pension scheme is bound by the spirit of what the parties intended rather than the precise wording of the order/annex as interpreted in the light of current regulations. Assume the worst, be very cautious, and you are less likely to get bitten.

I don't understand why the regulations don't give the "internal transfer" sharers a bit of protection - if the scheme rules insist on the pension credit being retained within the scheme should the regs then require them at least to disclose the method they will use to calculate the pension credit income?
For the poor saps having to make the choice of whether to stay in a final salary scheme the information on the rules to be applied is critical to negotiations - how much would it cost the scheme asked for information for pension sharing purposes to issue its formula for calculating the pension credit pension and an illustration based on sharing 50/50?
The Pensions Ombudsman said he expected to see the age at which a pension credit member could take a full income from the pension as part of the answer to Q5 on pension credit benefits in Form P. Why isn't that information specifically required under the regulations and in Form P?


PS the 3 questions to the pension scheme in the official form Form P about what they will do with the pension credit:
4.(a) Does the person responsible for the pension arrangement offer scheme membership to the person entitled to a pension credit?
(b) If Yes, does this depend on Employer and/or trustee approval?
5. If the answer to 4(a) is Yes, what benefits are available to the person with the pension credit?

Why is so little information required under the regs?