pension sharing order, fixed amount or %age
Discussion
Going through divorce at the moment and having totted up the value of assets including a cetv of my pension fund, we've agreed a figure which equates to 30% of the cetv. How does this work in practice, I've got about 10 years before I draw my pension, by which time the pot will have gone up a fair amount. Does the court order specify the 30% be transferred immediately to a new pension provider set up by my ex?
That depends on the scheme - some don't permit a transfer out for instance, and dictate an income stream instead. Most will require the amount, however expressed, to move to a personal scheme. Some may permit transfer to another DB scheme.
I can't emphasis this enough though. Make sure that you consider getting an actuarial report, properly instructed. Further, dig into the nuance of the transfer value. It may be the case that the scheme trustees have issued a value that's revised downwards (for any number of reasons). In those circumstances, you, and your soon to be ex-partner, have different rights.
I can't emphasis this enough though. Make sure that you consider getting an actuarial report, properly instructed. Further, dig into the nuance of the transfer value. It may be the case that the scheme trustees have issued a value that's revised downwards (for any number of reasons). In those circumstances, you, and your soon to be ex-partner, have different rights.
If you’re looking at a 50/50 split, I suspect it’s a long established marriage. If you’re in a DB scheme still, you’ve probably been in the scheme for over thirty years, and might be a higher rate tax payer. If your soon to be ex needs/wants a 50/50 split, she probably has few assets of her own, so to speak. You might have independent/soon to be independent kids.
I once had to give expert witness in a case where the wife was speaking a (superficially at least) disproportionately large amount of a DB transfer value. My heart sank when we were called and I saw that opposing us was a particularly ‘notorious’ barrister. Yet, we prevailed because we had done our homework, and we had put the effort into the actuarial report. We understood what both parties needed and drafted accordingly. He hadn’t. That case has become adversarial, he wanted her to have nothing, so the report helped everyone. It lowered the temperature. We were able to argue our case that (actuarially reduced so that my client could draw benefits at 55 as he was entitled to), as she would have been able to if she hadn’t married him, she should be allocated more % upfront to allow for the reduction from the normal retirement age of 60.
We worked out what our fold point was, and negotiated in the car park outside court to within 1.5% points. I told his barrister that as her client was going to be paying 40% on income anyway, and because we’d forego one or two other areas, unless we shook hands before 1700, I was going to have her come back the next day and it’d be a big immediate loss for him. She certainly didn’t want to stay overnight either, the judge was not on her side, that much was obvious. She briefed and advised her client at the end of a red fingernail, and we shook hands. It was a good deal for everyone, it made sense. It was subtle. My client got concessions which were important to her, he got a deal which allowed him to keep more income. I don’t think his barrister understood the nuance of surrendering so much in the way of pre-97 contributions though - vital to my client. That’s another story.
My point is this. The report informed us, it gave us all we needed to know. In my experience, most blokes aren’t vidictive and don’t simply want to ‘shaft the ex’. If you have children, it’s important to be seen to be doing the right thing, too. It’s all about knowing the facts, the needs, wishes and feelings of the other side. And usually, if you and the ex want things to be amicable, a report can help. Let’s face it, you could draft it privately and keep the findings to yourself, if they’re THAT ‘bad’, lol. As far as I’m aware, my client didn’t take benefits at 55 (funny old thing!) as originally argued, and is sitting pretty getting closer to taking a larger, unreduced income at 60. But it’s not always about being tactical to outflank someone, that’s the important thing. It can bring two parties together because it can crystallise what’s important, and inform much better decision making. And that’s just as important for the long term.
I once had to give expert witness in a case where the wife was speaking a (superficially at least) disproportionately large amount of a DB transfer value. My heart sank when we were called and I saw that opposing us was a particularly ‘notorious’ barrister. Yet, we prevailed because we had done our homework, and we had put the effort into the actuarial report. We understood what both parties needed and drafted accordingly. He hadn’t. That case has become adversarial, he wanted her to have nothing, so the report helped everyone. It lowered the temperature. We were able to argue our case that (actuarially reduced so that my client could draw benefits at 55 as he was entitled to), as she would have been able to if she hadn’t married him, she should be allocated more % upfront to allow for the reduction from the normal retirement age of 60.
We worked out what our fold point was, and negotiated in the car park outside court to within 1.5% points. I told his barrister that as her client was going to be paying 40% on income anyway, and because we’d forego one or two other areas, unless we shook hands before 1700, I was going to have her come back the next day and it’d be a big immediate loss for him. She certainly didn’t want to stay overnight either, the judge was not on her side, that much was obvious. She briefed and advised her client at the end of a red fingernail, and we shook hands. It was a good deal for everyone, it made sense. It was subtle. My client got concessions which were important to her, he got a deal which allowed him to keep more income. I don’t think his barrister understood the nuance of surrendering so much in the way of pre-97 contributions though - vital to my client. That’s another story.
My point is this. The report informed us, it gave us all we needed to know. In my experience, most blokes aren’t vidictive and don’t simply want to ‘shaft the ex’. If you have children, it’s important to be seen to be doing the right thing, too. It’s all about knowing the facts, the needs, wishes and feelings of the other side. And usually, if you and the ex want things to be amicable, a report can help. Let’s face it, you could draft it privately and keep the findings to yourself, if they’re THAT ‘bad’, lol. As far as I’m aware, my client didn’t take benefits at 55 (funny old thing!) as originally argued, and is sitting pretty getting closer to taking a larger, unreduced income at 60. But it’s not always about being tactical to outflank someone, that’s the important thing. It can bring two parties together because it can crystallise what’s important, and inform much better decision making. And that’s just as important for the long term.
Ginge R said:
If you’re looking at a 50/50 split, I suspect it’s a long established marriage. If you’re in a DB scheme still, you’ve probably been in the scheme for over thirty years, and might be a higher rate tax payer. If your soon to be ex needs/wants a 50/50 split, she probably has few assets of her own, so to speak. You might have independent/soon to be independent kids.
I once had to give expert witness in a case where the wife was speaking a (superficially at least) disproportionately large amount of a DB transfer value. My heart sank when we were called and I saw that opposing us was a particularly ‘notorious’ barrister. Yet, we prevailed because we had done our homework, and we had put the effort into the actuarial report. We understood what both parties needed and drafted accordingly. He hadn’t. That case has become adversarial, he wanted her to have nothing, so the report helped everyone. It lowered the temperature. We were able to argue our case that (actuarially reduced so that my client could draw benefits at 55 as he was entitled to), as she would have been able to if she hadn’t married him, she should be allocated more % upfront to allow for the reduction from the normal retirement age of 60.
We worked out what our fold point was, and negotiated in the car park outside court to within 1.5% points. I told his barrister that as her client was going to be paying 40% on income anyway, and because we’d forego one or two other areas, unless we shook hands before 1700, I was going to have her come back the next day and it’d be a big immediate loss for him. She certainly didn’t want to stay overnight either, the judge was not on her side, that much was obvious. She briefed and advised her client at the end of a red fingernail, and we shook hands. It was a good deal for everyone, it made sense. It was subtle. My client got concessions which were important to her, he got a deal which allowed him to keep more income. I don’t think his barrister understood the nuance of surrendering so much in the way of pre-97 contributions though - vital to my client. That’s another story.
My point is this. The report informed us, it gave us all we needed to know. In my experience, most blokes aren’t vidictive and don’t simply want to ‘shaft the ex’. If you have children, it’s important to be seen to be doing the right thing, too. It’s all about knowing the facts, the needs, wishes and feelings of the other side. And usually, if you and the ex want things to be amicable, a report can help. Let’s face it, you could draft it privately and keep the findings to yourself, if they’re THAT ‘bad’, lol. As far as I’m aware, my client didn’t take benefits at 55 (funny old thing!) as originally argued, and is sitting pretty getting closer to taking a larger, unreduced income at 60. But it’s not always about being tactical to outflank someone, that’s the important thing. It can bring two parties together because it can crystallise what’s important, and inform much better decision making. And that’s just as important for the long term.
That is quite an incredible story Al. I am not sure what sticks out the most but will go with your remarkable achievement of starting off representing the husband:I once had to give expert witness in a case where the wife was speaking a (superficially at least) disproportionately large amount of a DB transfer value. My heart sank when we were called and I saw that opposing us was a particularly ‘notorious’ barrister. Yet, we prevailed because we had done our homework, and we had put the effort into the actuarial report. We understood what both parties needed and drafted accordingly. He hadn’t. That case has become adversarial, he wanted her to have nothing, so the report helped everyone. It lowered the temperature. We were able to argue our case that (actuarially reduced so that my client could draw benefits at 55 as he was entitled to), as she would have been able to if she hadn’t married him, she should be allocated more % upfront to allow for the reduction from the normal retirement age of 60.
We worked out what our fold point was, and negotiated in the car park outside court to within 1.5% points. I told his barrister that as her client was going to be paying 40% on income anyway, and because we’d forego one or two other areas, unless we shook hands before 1700, I was going to have her come back the next day and it’d be a big immediate loss for him. She certainly didn’t want to stay overnight either, the judge was not on her side, that much was obvious. She briefed and advised her client at the end of a red fingernail, and we shook hands. It was a good deal for everyone, it made sense. It was subtle. My client got concessions which were important to her, he got a deal which allowed him to keep more income. I don’t think his barrister understood the nuance of surrendering so much in the way of pre-97 contributions though - vital to my client. That’s another story.
My point is this. The report informed us, it gave us all we needed to know. In my experience, most blokes aren’t vidictive and don’t simply want to ‘shaft the ex’. If you have children, it’s important to be seen to be doing the right thing, too. It’s all about knowing the facts, the needs, wishes and feelings of the other side. And usually, if you and the ex want things to be amicable, a report can help. Let’s face it, you could draft it privately and keep the findings to yourself, if they’re THAT ‘bad’, lol. As far as I’m aware, my client didn’t take benefits at 55 (funny old thing!) as originally argued, and is sitting pretty getting closer to taking a larger, unreduced income at 60. But it’s not always about being tactical to outflank someone, that’s the important thing. It can bring two parties together because it can crystallise what’s important, and inform much better decision making. And that’s just as important for the long term.
Ginge R said:
...so that my client could draw benefits at 55 as he was entitled to...
Yet ended up representing the wife:Ginge R said:
My client got concessions which were important to her ...
As I say, quite a remarkable achievement to pull off!
Hi Julian,
No, that was correct. Let me explain.
Until recently, the earliest age that a former spouse or former civil partner of Armed Forces Pension Scheme could claim their pension was age 60 or 65 (depending on the rules of the specific scheme). Now Pension Credit Members may claim their benefits at age 55 or current age if over 55, rather than age 60 or 65, but their benefits will be adjusted for early payment, just as the scheme member can.
No, that was correct. Let me explain.
Until recently, the earliest age that a former spouse or former civil partner of Armed Forces Pension Scheme could claim their pension was age 60 or 65 (depending on the rules of the specific scheme). Now Pension Credit Members may claim their benefits at age 55 or current age if over 55, rather than age 60 or 65, but their benefits will be adjusted for early payment, just as the scheme member can.
ironv8 said:
Going through divorce at the moment and having totted up the value of assets including a cetv of my pension fund, we've agreed a figure which equates to 30% of the cetv. How does this work in practice, I've got about 10 years before I draw my pension, by which time the pot will have gone up a fair amount. Does the court order specify the 30% be transferred immediately to a new pension provider set up by my ex?
Just to get back to the OP. Sorry to hear about your current predicament. Try not to let it stress you too much (easier said than done!).It is usual for the Family Courts to set any order for ancillary relief based upon the financial situation at the time of the hearing - not at a future date. If a pension sharing order is granted then this will usually relate to the value of the funds at the point of the court order (not the future value).
In practice the pension sharing order should compel the scheme trustee to transfer the given percentage into a new pension held on behalf of your wife.
So your first action should be to check with the Scheme Trustees that, with a court order in place, there is no reason they cannot (or would not) comply with this.
This way you (obviously) will lose 30% of your accrued rights to date, but retain 70% of these to date and 100% moving forward.
I hope that is helpful.
Ginge R said:
Hi Julian,
No, that was correct. Let me explain.
Until recently, the earliest age that a former spouse or former civil partner of Armed Forces Pension Scheme could claim their pension was age 60 or 65 (depending on the rules of the specific scheme). Now Pension Credit Members may claim their benefits at age 55 or current age if over 55, rather than age 60 or 65, but their benefits will be adjusted for early payment, just as the scheme member can.
Sorry?! Are you saying it is correct that you started off representing the husband and ended up representing the wife? That was the point I raised...No, that was correct. Let me explain.
Until recently, the earliest age that a former spouse or former civil partner of Armed Forces Pension Scheme could claim their pension was age 60 or 65 (depending on the rules of the specific scheme). Now Pension Credit Members may claim their benefits at age 55 or current age if over 55, rather than age 60 or 65, but their benefits will be adjusted for early payment, just as the scheme member can.
Ginge R said:
Hi Julian,
You can argue the merits, or otherwise - obvs, of my syntax all day long. But please don’t wreck a thread that’s very important to someone, simply because you are bored and have an itch you need to scratch. That’s my last word. Cheers.
Hi Al,You can argue the merits, or otherwise - obvs, of my syntax all day long. But please don’t wreck a thread that’s very important to someone, simply because you are bored and have an itch you need to scratch. That’s my last word. Cheers.
I think you are massively missing the point here. I am not the one hijacking this thread - that is you.
You went into great depth at the beginning of your story about representing the cause of the husband, before claiming victory for your representation of the wife towards the end of you post.
I am only asking how you managed to achieve such an outcome?
It is nothing to do with the merits, otherwise or syntax. It is simply about the facts you put forward.
Of course, you are free to not answer at all, if doing so is too difficult.
Thanks Julian, yes it certainly is a stressful time, kids are grown up and either working or at uni. Having read the info from my pension trustees my wife will have to have some kind of pension into which the 30% can be deposited, from the cetv that equates to about £140k. I'm guessing the family court judge will have to use the most recent valuation of the pension which is from february this year, another cetv valuation is 300 quid, on top of the £2100 they want just to transfer the money out.
ironv8 said:
Thanks Julian, yes it certainly is a stressful time, kids are grown up and either working or at uni. Having read the info from my pension trustees my wife will have to have some kind of pension into which the 30% can be deposited, from the cetv that equates to about £140k. I'm guessing the family court judge will have to use the most recent valuation of the pension which is from february this year, another cetv valuation is 300 quid, on top of the £2100 they want just to transfer the money out.
No problem. Yes, it certainly is a stressful time, but believe me it does actually get better. In fact, better then it was before (I didn't believe this either, at he time. It is, however, very true).The Family Court can only make a decision on the facts of the day though. However, if she is taking 30% of the pot the reality is it doesn't matter to you whether that is a fixed amount that comes out today or 30% of a higher future value. You are left with 70% of both in either case.
Edited for clarity
Edited by JulianPH on Saturday 8th September 08:50
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