Hi Maggie and guys
Maggie here is a copy of a post I have done
before on pensions...
"Ah pensions - every family lawyers
favorite topic! I was trying to stay out of this one....but sometimes I
just cant help sticking my oar in!
Firstly CETVs....CETVs are
not something designed by courts or lawyers. They were a mechanism already
in existance in the pension world that the justice system looked at and
decided was as good an indication of "value" as any to be used in providing
a figure to be used in matrimonial proceedings.
Because a CETV
was not a mechanism designed to be used by us lot at the coal face, there
are several flaws to it, and in particular we know that for the Armed
Forces, uniformed services and the NHS we have to get an actuarial report
because a CETV is quite often significantly less for those pensions due to
how those providers calculate the figure. In short, a CETV is a blunt tool,
but the only tool we have readily available as a starting point.
As Peter has told us all on many occasions, it can actually be worthwhile
getting an actuarial valuation in all cases when a pension is relevant
because it can prove to be beneifical...however, when at the coal face we
have to undertake a costs benefit analysis of every step we take, so in
many cases will just accept the CETV (save for those pensions above) just
as we will try and agree a valuation of the FMH rather than spend funds on
a proper valuation report.
That said, if you want an actuarial
report of yor own pension there is nothing stopping you instructing your
lawyer to get you one. However, if you want an actuarial report in respect
of your STBX pension and it is outside of the schemes above, you have to
convince a judge to order it, and are likely to have to pay at least half
the cost of it.
And of course, it is not just the cost of the
report - if either party disagrees with the report, the actuary has to be
called...as the divorce lawyers bible (Duckworth) says...
" ...it
ramps up the cost of litigation to call an actuary, even as a single joint
expert. The solution should therefore be reserved for those one off cases
where precision really matters..."
In short the issue of an
actuarial report has to be looked at on a case by case basis to ensure the
benefit outweighs the costs.
The question of how much of a CETV
or actuarial valuation of a pension should be taken into account for
offsetting is a vexed one. A pension is not a capital asset so cannot be
compared to one. There are several variables that need to be taken into
consideration, such as whether the pension is in payment and if not how far
off the pension is.
The second variable is the impact of the age
of the parties on this question. A party under 30 is not likely to succeed
at all in having their STBX's pension brought into consideration. A party
under 35 is unlikely to have a pension brought into consideration.
At the other end of the scale, a party of 50 or above would certainly
succeed in having the pension brought into consideration unless another
section 25 criteria excluded it.
This leaves us with the grey
area of a party aged between 35 and 50 and how much consideration should be
given to the pension. We also then have to throw into the mix the age of
the STBX and consider how that effects the pension.
The next
variable is the duration of the marriage and how that impacts on the
pension. If the marriage was long (over 20 years), this is likely to be an
irrelevancy. In short marriages (up to 5 years) the pension is unlikely to
be considered, unless one of the other section 25 criteria demand it.
For marriages in between there will undoubtedly be an argument
about the years of the marraige compared to the years of the pension, which
may well reduce the amount of the pension which is taken into
consideration.
In short, what I am saying is that there are many
variables which are taken into consideration when offsetting. There is a
practice in some courts to look at a 25% as a figure that is fair in all
the circumstances to cut through the arguments. In some cases this is fair,
in others it is less so and therefore relevant arguments can and should be
raised.
When looking at ancillary relief it is hard to give
general advice, as every case is decided on its own facts, and that is
something that should always be remembered."
It seems to me that
people often look for precision and a one answer approach in these
matters...but ancillary relief is far (very far) from being precise, and as
I say to my clients - there is always more than one way to skin the cat.
There is never only one answer in AR and you have to look at what is best
for your client, in the short, medium and long term, and then let them
choose what is more important to them. In many cases the client would be
better off in the long term with a pension share, but for many women (and
it is by and large women), the short and medium term is much more important
to them, hence we look at offsetting for a bigger share of the pie now.
Then we have to throw the facts of the case into the mix to work out what
is a fair offsetting value.
In terms of the income versus
capital issue, again, it all depends on the facts of the case and how they
interact with the section 25 criteria, plus what is most beneficial to the
client and again, what the client wants in terms of the short, medium and
long term. There isn't one answer as to what is best, as what is best for
Mr X would never be what is best for Mrs Y.
In terms overall
about the pension problem and how we deal with it on the ground, this is no
answer, but the answer is as above - we chuck it into the mix and see
firstly how relevant the pension is and then what the client wants to
acheive. I know that doesnt help folks on here, but that is the reality
from the coal face.
One final point...Mr DL is the pensions
person in our household (Mr DL also being a barrister), and as soon as he
and Peter from BDM have some time they are going to do some joint articles
to try and simplify this matter for wiki peeps as far as they can - I have
to say, I wish them well with that, and I am just glad it is not me doing
it
.
Amanda
Forum 
England and Wales 
