Pensions

Hey all

My partner who is divorcing his stbx has had his CETV through:

they are both 36
have no children
have no assets as the family home was military accommodation which both have moved out of, its just the pension really.

He paid all the bills whilst she sat at home of her own accord, no joint debts just debts solely in their names, hers are mainly with catalogues for clothes, my partner doesnt have a clue what debts she may have as she kept these quite well hidden only when he was moving out did he find the debts piling up hidden under the bed mattress etc.

His net income is just over £1700 on this basis will he still have to pay spousal maintenance?

with regards to his pension we now have the following information to hand:

they were only married for just over 6 years:

Annual Pension - £6525
Terminal Grant - £19577
Widow/er Pension - £4078
Transfer Value - £64222

my question is what is the likeihood of the court in sharing out the pension, will it go 50/50 or could it still be given all to stbx etc.

and can anyone explain what Transfer value means.

ty

moonsoon,

The stbx will be entitled to a share of the pension, however good argument can always be proferred by both sides in situations such as this. IMHO your partner should be looking to offer 50% of the six years, naturally the stbx will argue otherwise. It may be worth your while contacting Peter or Nigel, the wiki pension experts.

E

Hi Moonsoon

The transfer value is the sum that the scheme would pay if your partner wished to transfer his pension out of the armed forces scheme and into another pension arrangement. If he is still in service and a member of the scheme, he cannot transfer the pension (an in most cases it would be a VERY bad idea).

It is best to think of the CETV rather like an estate agents valuation of a property; a reasonable starting point but not necessarily the perfect valuation.

From what you say, it makes little sense to get involved in a pension sharing order for a pension valued at £64k. The cost of doing it will just outweigh the benefits.

My guess is that your partner has been in the service for a much longer period that the marriage. If so, he could probably argue that her entitlement to his pension is reduced accordingly. For example, if the total service was 12 years as the marriage lasted six years then only half the pension should be considered to start with (half of £64k or £34k). She might then look at half of that (on the basis that everything is split 50:50 between the parties), or £17k.

The pension cannot be converted into cash, so the next challenge is how she gets hold of this theoretical entitlement. For this sort of sum, the most practical solution would be for him to give her cash so that he can keep hold of his pension. This takes us to the argument of “discounting” pension values when coming to this sort of arrangement. Many do this by very crude guesswork and basic bargaining between the parties. It can be done in a more scientific way and that would cost about £240 for a report, which is a lot of money to spend on a relatively small pension value. Whether it is worth it depends on how the simple bargaining goes, particularly if it can be done without paying lawyers to do the arguing.

All this assumes that there is a chance of getting the cash together to pay her off.

A final word of warning; all the above is based on using the CETV. The CETV will undervalue the pension, so she could justifiably argue that a more appropriate valuation is used, but that will cost more money.

Sorry about all the doom and gloom but I hope that this helps.

Peter.

Peter@BDM wrote:

From what you say, it makes little sense to get involved in a pension sharing order for a pension valued at £64k. The cost of doing it will just outweigh the benefits.

HI Peter
why would it make little sense to get involved in a pension share for 64K.
What would the cost of this be and why would it out weigh the benifits .
Is it because in this case only half of the 64K ie 32K may be only be considered or are we talking its just not worth it for 64K.

And what if one party did not have the means to pay out a share in cash to be able to keep the pension in tact .
Or it just would not be feesiable for the other party to be able to take a cash payment for what ever reason from the pension holder lets say on a 50/50 settlement of 32k each for example or even on 16K settlement

Sorry if i am making things complicated


I am also sorry if this seems a daft question just curious to know the answer and to be able to gain some knowledge at the same time because it all helps with understanding how it all works ect ect .

Thankyou




Moonsoon
There is a rather long army pension thread on this site but cannot find the link but it is full of lots of information i will try and find the link if i can .

Didox

Yes, would be useful to know what is the minimum pension value where it would be cost-effective to have pension sharing or earmarking - what are the costs involved in these?

I suppose offsetting would be the only option if other assets were there?

Hi didojane

A good question, as always.

We work on the broad assumption that to do a pension sharing order from start to finish will cost about £2,500. Some will cost less, depending on what the scheme charges for implementing the order. In this particular case, the CEV “value” that she might get is around £17k. On the basis of these very crude numbers and assumptions, it doesn’t seem a particularly good deal to me that you pay £2.5k to get £17k. It is not even as though this would be £2.5k gain for one party over the other, effectively, their worth would drop by that amount. Much as I believe in the value of pensions, that sort of deal does not make much sense to me.

Peter

hi thankyou all for your responses it has helped alot

yes my partner is in the armed forces and had already served over 8 years before he got married.

However what im now worried about is that instead of a pension sharing order about offering a cash sum.

we havent that type of money floating about, we barely have enough money to keep ourselves.

and my partner definately would not be able to find 32k or 16k just to pay her off.

there is no marital home or assets and no children from the marriage.

in this marriage he paid all the bills, is has even taking on some of the debt from it so why should we have to go into debt for £16k-32k for someone excuse my french just sat on her fat backside all day long, when she herself had the opportunity to go to work.