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Pension Sharing

Posted by gammyleg 
Pension Sharing
August 05, 2019 06:00PM
Hi,

I have recently divorced from my wife and have now only to resolve the issue of pension sharing ( all other marital assets have already been split 50/50 ). We are both 56yrs of age and were married for 30yrs with no dependent children

I employed the services of an accredited resolution financial advisor to look over our respective pensions and the figures are as follows:

Me - CETVs - £262,000. Estimated Pension - £8,100 pa

Ex - CETV - 92,000. Estimated Pension - £6,260 pa

Using the cash equivalent values as a basis for the sharing agreement I would have to give my ex ~ £85,000, however by doing that my estimated pension at retirement would drop to ~£5,300 pa, substantially less than what my ex is likely to receive and that is without her reinvesting any of the £85k that I give to her

My ex has a "Gold Standard" LGPS defined benefit pension which, although the CET value is low, her final pension benefit at a retirement age of 67yrs is likely to perform far better than my combined defined contribution pensions will.

With this in mind and using the calculations that were supplied by my financial advisor, an amount of ~£32,000 transferred to her and re-invested in a suitable DC pension could leave us with a similar pension pa when we both retire.

My ex has verbally agreed to this reduced sum option as long as it is paid in cash directly to her, which I could just about manage by combining savings and cashing-in one of my DC pensions, but I am worried that when this agreement submitted formally to the court ( with an explanation as to how it was derived ) it would be rejected in favour of a settlement based solely on the CET values.

Would you have any idea as to the likelyhood of success?

Thanks
Re: Pension Sharing
August 15, 2019 10:54AM
In the case of a marriage of this length a court is unlikely to think that equalising capital transfer values is the best way forward. It is much more likely to take the view that pensions should be divided in such a way as to provide for equality of pension income at a given date. Working out the pension share required to do that usually needs a calculation by an actuary.
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