1 year ago

Get The Correct Pension Valuation

Warning! This Blog Is Going To Bore You!

Your divorce will cover the children and your finances. The correct pension valuation will be required. You may not be happy about the way the pensions are viewed.

Breadwinners are not more important than home-makers.

Yes! You can moan about this until the cows come home. Caselaw “White v White” prevented the courts discriminating between who played what role in a marriage.

My advice? Dont go down that rabbit- hole ranting about the injustice of it. Suck it up. Ask yourself what if the marriage had been successful and you had both stayed together.  Would you have really purchased an annuity that only provided YOU with income. What did you think would happen if you died before your spouse? What would they live on and would it have been enough?

If its different to my Annual Statement -How do they calculate it?

This is very very complex as there are many different types of schemes and rules. Parliament rules and HM Treasury are in charge! CETV calculations can change from year to year. Plan for a long wait to get your CETV.

How do I get one?

OK so I will use the NHS as an example here. They are the biggest employer in the UK so chances are this could be applicable to you!

Get The Correct Pension Value

You will be asking for the following :

• A “Cash Equivalent Transfer Value”
• Ask for an idea of the timescale they can produce this for you
• Is it free?

Organisations may do ONE for free the first time round and others charge each time.

They will probably get you to fill in more than one form. They really do need accurate information. Ensure your employer fills it out accurately and promptly. Keep an eye on how they are doing! Your CETV can be affected by the length of service you were in the pension scheme for. For example- the NHS cannot provide a CETV if you worked less than two years for them. They need to know if you are still active in the scheme or left recently. How come they dont know? Many large employers use a separate pensions administrator who wont have access to your employment records.

Get The Correct Pension Value

How Long Will It Take To Get My CETV?

Dont under-estimate this. For example, the NHS advises it takes 3 months to provide. YES – read that again……3 months.

Get The Correct Pension Value:

Tell them if you have a deadline to meet. You may have a court date and / or a Court Order that says when the CETV is due by. Include your Court paperwork stipulating deadlines. They may well bump you up their admin list! Paperwork in pension companies usually have an admin triage system. Make it extremely obvious if you are working to a deadline!

Is It Free?

No – not always! Pension companies are allowed to recover their costs to provide this information. Some therefore charge each time and others will give you a free one at first but charge you afterwards. Most pension companies will ask for payment for this upfront. It is also chargeable if there is a Court Order which instructs changes to be put into operation.

Again- lets use the NHS as an example. They will give you annually the chance to obtain one (for any purpose) for FREE.  You will need to pay if

• you have had one in the last year,
• or if you are already a scheme pensioner
• or if you need it within 6 weeks.

“The Left Hand Does Not Speak To The Right Hand….”

Chase up your employer to get the correct pension valuation. Ensure they are putting accurate information on the forms so there are no delays!

Leaving It Until The Last Minute Could Cost You!

Again I will use the NHS as an example. Hopefully you get a FREE one! However, if you want a CETV within 6 weeks from the NHS Administrators they will charge you £408.00. Charging information correct as of May 2023.

At the end, they can also charge to implement and acknowledge the Court Order. The Charges in May 2023 for a Pension Sharing Order on an NHS Pension is £1693.56. Additional supplemental work incurred can also be chargeable too – on a hourly basis. Its all starting to feel like a solicitor’s charging structure isnt it?!

 

I Cant Pay The Charges Upfront!

Its always worth contacting the pension company. Find out if they have a procedure that helps you to get your CETV without charges paid upfront. For example- someone who is experiencing financial abuse. Try and find out – if you dont ask – you will never know!

Why Does It Take So Long?

Simply – the Courts allow 12-16 weeks to give both you and your ex time to collate everything you need. Therefore the Pensions Administrators have always worked to this schedule.

What Happens Next To My Pension?

Ideally the pensions administrator like to see a copy of the draft order simply to ensure that they can implement the Court’s Order. There isnt a legal responsibility to do this however.

 

And Finally….

After the Court Order has been sealed, the pensions company are notified. They have a time scale (usually 4 months) to credit the pension to the ex spouse. There are also ear-marking orders. These are far and few between these days and outside the scope of this article. Sometimes, the pension company dosn’t have all the information it needs. Your ex spouse may not have located a financial adviser or identified where the credit will go. The pension company will keep you  both informed what the delays are and also when its been completed.

In summary, Ive used NHS as an example here and used the May 2023 charges as an example. The most important TOP TIPS I would ask you all to consider:

• Annual Pension Statements are NOT CETVs.
• Not all CETVs are issued quickly.
• Plan PLENTY of time ahead to obtain it.
• If you leave it to the last minute – you will end up paying to get it on time.
• Pensions are an asset to the marriage and that means BOTH of you!
• It also costs money for a pension company to implement it and acknowledge it.
• Pension calculations are complex and the rules vary for each scheme and each type.
• Do not assume that your employer will rush the information through. You will probably have to chase this up!.
• I will say it again Annual Statements are NOT CETVs.