Posted November 8th, 2010
I was approached this week by a lady wanting to know whether she could share a pension which she thought might be in the Pension Protection Fund (PPF).
The scheme in question, the Turner & Newall Pension Scheme, applied to go into the PPF in April 2006. Despite four years passing this pension scheme has not been transferred into the PPF which for the lady in question was good news.
This is because under current legislation a pension in assessment for the PPF can have a pension sharing order implemented against it whilst one that has transferred into the PPF cannot. This might seem ridiculous but it is to do with the “pension rights” changing to “compensation payments” after acceptance into the PPF, hence a pension sharing order cannot be applied.
There is good news on the horizon though; the PPF should be in a position from next April to implement pension shares for schemes which have transferred with effect from April next year (assuming that the draft legislation is implemented).
So if your divorce involves a pension which is in assessment for the PPF or is already in the PPF the timing of a pension sharing order is important. For more information on this issue, please feel free to contact me.
Tags: Assessment, Compensation Payments, Divorce, Pension, Pension Protection Fund, Pension Rights, Pension Scheme, Pension Shares, Pension Sharing, pension sharing order, PPF, Turner & Newall, Turner & Newall Pension Scheme | Posted in Pension Protection Fund |
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Posted March 19th, 2010
The prescribed method of valuing a pension for divorce purposes, whether the pension rights are to be subject to pension offsetting, pension attachment or pension sharing is the Cash Equivalent Transfer Value (CETV).
The CETV is the capital value of the pension rights as calculated by the scheme actuary or the pension provider. This valuation method is used where the pension is being accrued or is not yet in payment.
Where the pension is actually in payment, a different valuation basis needs to be used. This is the cash equivalent of benefit (CEB) calculation and it does give a capital value which can be shared, offset or earmarked. If you google the Martin-Dye v. Martin-Dye judgement you can find more information out on this valuation basis.
Neither calculation (CETV or CEB) is subject to standard actuarial methods and each defined benefit scheme will use a different valuation basis.
I cannot emphasis how important understanding this aspect of pensions and divorce is to maximising your settlement. Scrutinise the value to decide whether it represents fair value.
If you need further assistance with your CETV or CEB feel free to contact me for a confidential chat.
phil@thedivorceifa.co.uk or 0800 092 1229
Tags: Accrued, Actuarial Method, Asset, Attachment, Calculation, Cash Equivalent Transfer Value, CETV, Divorce, earmarking, Martin-Dye, offsetting, Pension, Pension in Payment, Pension Provider, Pension Rights, Scheme Actuary, Sharing, Valuation Method, Value | Posted in Transfer values |
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