Re:CETVs and liquid assets

Can any help? I'm looking to get an idea of the exchange rate when exchanging pensions for liquid assets. Specifically, CETVs vs property. I know it's not a clear are at all and subject to many variations. But a reasonable range would be very helpful. I've been told that CETVs could be discounted by as much as 75% and as little as 25% when exchanged for property. All views welcome!

I believe a lot will depend on how soon the pension will be payable. Yes the 25% guideline is often referred to on here in exchange for other assets. However each case is different there is no rule. Alot will depend on when the pension is payable, if pensions are to be paid out sooner rather than later the 25% may not apply and they may be treated nearer to the real value.

Hi RichardW

It also depends on the type of Pension.

A specialist is required to value a pension - the courts haven't a clue.

There are a few people who know something about this on the board and hopefully one of them will be able to help you out.

Good luck!

YA

Thank you - hoping to get more as and when anyone has it.

Richard, the reference to 25% is really quite dated. I've never been able to identify where it originated from but suspect that it relates to the fact that around 25% can be taken as a cash sum and historically only benefits payable in the near future were considerd.
Start point is that CETV valuations vary quite wildly, each set of pension scheme trustees sets the assumptions for their scheme and the initial purpose of CETVs was nothing to do with valuation for divorce purposes. I start by valuaing pension benefits on a basis which I use for all cases irrespective of which side I act for.
Second point is that pension is taxable, so the proportion paid to HMRC should be excluded.
Third point is that, if it's a defined benefit scheme there will be a spouse's pension, the value of which is included in the CETV, depending on the circumstancs it may be appropriate to exclude this.
Once you have gone through the process above you are then in a position to consider the discount to reflect the difference between pension benefits payable in a prescribed manner and other more liquid assets - adjustment for utility value.
Unfortunately there is no standard recognised methodology for allowing for differing utility value. I have prepared some reports which inclde a valuation allowing for utility adjustment for illustration, however I suspect that in many cases, it comes down to negotiation and/or court deciding.
Hope that's of use.

Ian