Claiming Pension

I can see arguments on both sides for having dependants benefits in or out of the valuation - be it CEV / CETV or CEB.

As Peter states no money moves out of these types of scheme so there is no particular advantage / disadvantage to the scheme in monetary terms. Bless us it is the taxpayer that is funding the bulk of these schemes.

However, if equality of income is not being used as the method of settlement this becomes so much more of an issue because clearly excluding dependent's benefits will decrease the CEV (which is arguably undervalued to start with!)

Would a CEV / CEB / CETV initial review service be the answer?

Phil

The Divorce IFA

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.

Maggie

Paranoid, me? Who said that?

Our view is that the schemes will use the CEV rather than CETV on a pension sharing order, in which case – spouses beware, you could be getting short changed! If the spit is actuarially calculated, this should be taken into account. As I said, it is a brave person who does a pension sharing order without appropriate professional advice.

Peter.

I have been reading wikivorce for several years now and nothing I have read has persuaded me that acuarial reports etc are necessary unless the circumastances are particularly complicated. Sorry guys! I might be persuaded if someone could tell me how the AFPS and other final salary schemes calculate the credit member pension.

For instance, my ex (forces) and I are unusual in that we are both the same age and only have the pension to split. It used to be that after a PSO he would get his pension at 55 and I would have to wait until I was 65. Would an actuary really be able to tell me what pension I would get at 65?

Now the waters are muddied further because I will be able to take my pension at 55 as will my ex. There seems to be a great deal of confusion as to whether my pension will be a full pension or a reduced one, so could an actuary really tell me how much pension to expect if we had a 50/50 pension split? Sorry if I seem cynical but it does seem that pensions are cloak and dagger stuff with very little transparency!

This is the only AFPS pension sharing working out I've ever seen:
www.rafcom.co.uk/pay_allowances/pdf/divo...pension_benefits.pdf
Example - AFPS 05
A Servicewoman (salary of £20,000)
who has 15 years’ reckonable
service at the point of her divorce,
who is ordered to pay 50% (ie 71/2
years) of her pension accrued for
this period to her ex-husband, would
have her pension file annotated with
the amount of the sum to be debited
as a result of the Pension Sharing
Order. In this example the sum to be
debited is £2,143.
If she served for a further 15 years,
leaving with final pensionable pay
of £30,000, her pension would be
worked out as follows (assuming RPI
at 2% pa compound):
(30 x 30,000 x 1/70) less (2,143
increased by 2% pa compound
for 15 years) = 12,857 – £2,884
= £9,973
Thus the Servicewoman’s annual
pension would be £9,973 and it
would be this sum that the pensions
of any eligible dependants would be
based on in the event of her death."

Bearing in mind it's AFPS 05 - AFPS 75 formula may be more than 1/70th of the annual salary?
Seems as though you might arrive at some estimate of what £££ will leave his pension
and become yours - I don't know if that's tweaked to allow for the gender/longevity difference - after that index-linking increases until you hit 55 - Peter@BDM is confident post 2009 AFPS pension credit members can take a full pension at age 55.
Does this give you any clues on what your share might produce as pension income for you?

In my case I discovered after the FDR that no-one had any idea what my pension income would be - I think it's intolerable - the only thing you really want to know is how much pension income you can count on as in the bag so that you can assess how fair your divorce settlement is.

"In my case I discovered after the FDR that no-one had any idea what my pension income would be - I think it's intolerable - the only thing you really want to know is how much pension income you can count on as in the bag so that you can assess how fair your divorce settlement is."

This is my point exactly Maggie, it all seems to be speculation at best!

"Peter@BDM is confident post 2009 AFPS pension credit members can take a full pension at age 55. "
That is good news, but how can the AFPS afford to do that? We are talking about 10 years extra pension payments! Where is the money coming from to fund such generosity?

As for the rest of your post, I have seen examples which show how a pension share affects the service person. I suppose that is reasonable because the scheme is set up for the benefit of the members. I have never seen any examples which show how much a credit member would get. Perhaps when yours starts to pay out you will be able to tell us if it was what you were expecting and if you can make sense of how it was worked out!

P.S. in my case, with my ex and I being the same age and both receiving the pension at age 55, assuming a 50/50 pension split, what I would like to know is would we each receive the same monthly pension?

Logic and reason say that we should, but would mine be less because women live longer? Or would mine be less because it is worked out using some random figure i.e. the CEV/CETV?

I should explain penny that I'm not sharing an AFPS pension - I got a botched company final salary pension share a couple of years ago - I realised what happened to me could happen to others coming on so I want to try to open up the system in the hope no-one will sit down at a divorce finance negotiation like I did - without knowing the real effect on them of pension sharing/offsetting/attaching.
I feel there's something wrong with the AFPS charging for a "CEV for divorce purposes" instead of issuing the free CETV without making clear the difference to its own members.
Saying as AFPS do that your solicitor will explain is a cop-out and almost certainly over-optimistic.
The CEV costs £150 and then a fee for an actuary to analyse it?
What happens if a member asks AFPS for a free CETV so they can assess the benefits of a transfer out and then uses that as evidence on their pension for divorce purposes?