Case Study 4 - The Separating couple

Assets

Background

Mr & Mrs C were both aged 61, in good health, with three grown up children. Mr C had a British Petroleum pension in payment of £18,000 per annum with provision to Mrs C on death of £15,000 per annum (83%).

Concerns

  1. How to provide an adequate split of pension assets which was fair to both sides.
  2. No shadow membership available.
  3. CETV – poor value to both sides.

What we did

  1. Requested an actuarial report which stated that the share needed to be 63%:37% in Mrs C’s favour to equalise gross pension in payment of £7,000 each.
  2. We advised on the clients on their options including the costs of implementing a pension sharing order and the consequences of this approach.

The results

  • Clients decided not divorce but legally separated.
  • Mr C retained his higher pension.
  • Mrs C retained her 83% benefit on Mr C’s demise.
  • Both would have been short changed by a sharing order.
  • Novel and innovative solution.