how to count pension in 20+ years time?

Until we have the promised statement on discounting pension CETVs for offsetting on divorce from Divorcelawyer may I suggest that when lawyers suggest a figure for discounting the pension CETV we ask for the justification in our own particular case - ask for the legislation or case law that supports discounting the pension CETV and ask for the calculation to show what discounts are being proposed in our case and how they affect the overall settlement?
At least we could end the practice of discounts being regularly applied without proper explanation?
If the people affected would then post the results on wikivorce we might reach a better understanding of how pension offsetting is being conducted.
Maybe people who've already done offsetting could tell us what reasons for discounting the pension CETV they received from lawyers or judges?

am eagerly waiting for information on pension offsetting. i wish to retain m.h. and offsett against pension, however, inspite of reading all info i still do not know what percentage of same will be used. how can i find this out - my sols do not appear to know figure.

also my ex is 58 - does this mean a larger pecentage in my favour?

percentages quoted i.e. 25% or 75% make a huge difference.

I'm sorry I can't provide an answer to your problem - I have no idea how or why lawyers arrive at the discounts for offsetting a pension CETV.
I've had a look in a couple of the manuals - -Ancillary Relief Handbook - Judge Roger Bird and Pensions and Family Breakdown by David Davidson - there's no explanation of the calculation or the discounts to be used and no mention of relevant legislation or regulations.
Could you remind us who advised you the pension CETV should be reduced if you want a bigger share of the family home in exchange for leaving the pension intact and in your husband's name?

Hi

I am sorry I dont have time to do a long answer today, but the short answer is we look at what is most important to the PWC, which is often the house. Then we chuck the section 25 criteria at it to arrive at an appropriate outcome.

In the library there is a Pensions Digest, authored by Rothschild, but is a collection of the posts all about this topic - I know my previous long response is in there somewhere, but cant say where.

Amanda

(PS - you get to the library via the Community Home Page)

I can't find anything you've written that deals with offsetting specifically DL - the only long post on pensions I can find is this -
Can you confirm you mean this post?
Posted by divorcelawyer - 2008/05/14 20:24
"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 existence 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 beneficial ...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 vaiables 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 marriage 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."

Thanks Maggie. I've seen nothing to justify a systematic and arbitrary reduction of pension values, especially as a whopping 75%. I reiterate my view that reducing a pension value is wrong in most cases.

Amanda, I think you've hit the key to this practice in your post. The issue is not with the pension, but with the house. It is the insistance that one party gets the house, or the unwillingness / inability to divide the house between the two parties, that causes the problem.

I would submit that trying to resolve the problem of the house by looking at a totally different asset is fundamentally bad law.

I would suggest that what we need to discuss is not unjustifiable reductions to pensions, but rather "what is the right way to bring the house into the calculation"?

I think it has quite a lot to do with engineering a clean break - if you can reduce the pension CETV until it's at a level where it can comfortably be found elsewhere in the capital assets - hey presto - the much vaunted clean break?