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Teachers Pension offsetting - actuary worth it?

  • Time4Action
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27 Jul 22 - 30 Jul 22 #519683 by Time4Action
Topic started by Time4Action
Hopefully someone can shed some light.

Facts:
- My STBX (51) has a teacher's pension with a CETV calculation of £170,000 with 16yrs service.
- I (43) only have a state pension
- Our main asset is our joint property (Valued at £500) which I was hoping to retain and offset STBX's pension against the house.
- No kids. Just 2 alpacas!
- Similar income

Questions:
1) I don't want to go down the pension sharing route as I'd like to buy my STBX out of the property. Do I have a say in the matter or do the courts decide that? I presume if we both agree we are fine with that approach then it's up to the judge to ensure it's also a fair arrangement?
2) As I'm looking to pension offset her pension against the property I have read that a CETV is not the most accurate approach to use. Can I insist therefore that I appoint an actuary to review the pension? Or do both parties have to agree and does my STBX appoint an actuary to do this?
3) With an actuary charging in the region of £2000 to review a pension, is it worth having done? What ballpark pension figure can I be looking at?

Thanks so much!
Last edit: 30 Jul 22 by Time4Action.

  • hadenoughnow
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28 Jul 22 #519692 by hadenoughnow
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The first question is how do you propose your ex will be housed?

You cannot live in a pension and it is a long way off being in payment.

If you want to offset you could look up the new Galbraith tables that give offsetting figures for a range of scenarios.

The further away the pension is from being taken, the smaller the value for offsetting purposes.

Hadenoughnow

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29 Jul 22 - 29 Jul 22 #519698 by Time4Action
Reply from Time4Action

The first question is how do you propose your ex will be housed?


Assuming the CETV of 170k is correct, then crudely that would calculate as 500k / 2 = 250k each. If STBX is happy with retaining pension, then that would mean 250k minus 170k for me to buy out with 80k. STBX does not want any of pension going to me and would be willing to get own mortgage for new property.
Last edit: 29 Jul 22 by Time4Action.

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30 Jul 22 #519700 by hadenoughnow
Reply from hadenoughnow
A discount is applied to offsets so £1 of pension does not = £1 of cash asset. You cannot live in a pension.

The pension may well be more valuable in income terms than the CEV suggests but you are looking at capital value, not income.

A lot will depend on the likely cost of rehousing and the size of mortgage she would have to obtain. She may not like the idea of having to pay more from her income to fund housing for her self when a court would award her 50% of the capital and an equal pension share.

The pot is 500 + 170 so 670 (without offset discount). Her share is 335, of which she has 170. So to even things up she would need the 170 pension + 165 from the house.
If she is ok with the proposal and has had some proper advice on it, you can agree between you and apply for a Consent Order. This site offers a cost effective consent order drafting and submission service. You will need to complete a D81 setting out your finances and giving some rationale for the agreement to persuade the judge who has to approve the order that it is fair.

Hadenoughnow

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02 Aug 22 - 02 Aug 22 #519735 by Time4Action
Reply from Time4Action
Thanks for the sums!

So if I look at the tables and use that to re-value the pension and the overall offset:
500k House
285k Pension value (annual pension forecast 12k/annum x 20.684) excluding any lump sums.
785 / 2 = 392.5ea minus 285 (STBX pension value) = 107k that I would need to buy her out.

This would leave STBX with less cash now so likely I would have to pension share to some extent in order for her to purchase a property.

So obviously a 'better deal' for me and therefore from the face of it, worth me pursuing an actuary to get the pension re-valued it seems???
Last edit: 02 Aug 22 by Time4Action. Reason: Math!

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03 Aug 22 #519743 by hadenoughnow
Reply from hadenoughnow
I cannot comment on your sums but an actuary will be able to give an expert view.

Bear in mind that any split of house equity will have to meet her housing needs. It is important to establish what those are and explore mortgage capacity etc.

Hadenoughnow

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