Final Salary Pensions

Hi

Does anyone know if a cetv valuation of a final salary pension reflects its actual worth?

I'm aware that a cetv is a transfer valuation but as you have a guaranteed salary upon retirement shoudn't the valuation reflect this?

Thanks

Simple answer is no, it doesn’t.

Cost of getting a fair valuation is the issue. Probably not worth it if CETV is less than £30k. If pension sharing or attaching, questionable how significant the inappropriateness of the CETV is.

Hi Peter

If i was asking for a cash sum from my x pension around CETV £50 final salary what would i be likely to expect?

Thanks

Hi Joy

The main issue here is that although the pension value is significant, it really is not worth spending too much money proving and arguing points. That said, I’ll make some assumptions to give you something to work with.

I shall assume that your ex is still in the same employment (i.e. active scheme member). I shall also assume that he is not in any of the uniformed services. I shall also assume that you are not divorcing in Scotland.

On this basis, the CETV is likely to be between 20% and 30% lower than a fair value. This gives a possible value of £60k-£65k. Usual starting point is splitting pension 50/50, in which case you could argue for around £30k.

Don’t forget that the Additional State Pension (SERPS/S2P) should also come into the reckoning (he should get a valuation from the Pensions Office using form BR20). You may find that the Additional State Pension has a reasonable value as well.

hi peter

many thanks for that, But do you not contract out of serps? some do. How can i find this out. Oh hang on, when you pay into a company pension does the government not contribute as well. Or was this paid prior to him getting a coy pension, with the then married mans allowance. hard to understand normally, Peter.
many thanks
Joy

I've just had a BDM quickie - sorry Express Valuation - it values the final salary CETV at a staggering £145,000 over the scheme's own CETV.
I didn't have an independent pension valuation at my FDR - I don't know whether this valuation would have been accepted -
especially by the final salary scheme actuary - but it would have flagged up the problem and with the same % share I might have walked away with maybe £58,000 more pension CETV with no detriment to my ex's pension.

Peter@BDM - could I ask you what happens about getting a pension scheme actuary to accept a valuation higher than the scheme's own, which might result in a lot more cash leaving the scheme he's protecting.
If the court accepts the higher CETV, is it a done deal or does the scheme's own actuary have the right to reject it?