Pension in Payment

Both myself and wife are members of final salary pension schemes. However about 4 years ago following redundancy I drew my pension and it is now in payment. Part of the pension was taken as a tax free lump sum of which my wife has taken 50% following our separation. The rest is taken as an income stream.

Curiously my CEB is greater than my wife's CETV despite the fact that she earns a higher salary than me and that my pension is in payment.

My view is that given that she has received 50% of my lump sum, (and in effect benefitted from my pension), then I should be able to benefit in some way from hers. However the fact that my CEB is showing a higher figure means she is actually claiming part of the difference between my CEB and here CETV as well as having already benefitted from my lump sum. This feels like a double whammy!

I am almost 57 seven years old so have little opportunity of building another sizable pension. I have also been married for 31 years. I am quite happy for my wife to retain all of her pension benefits but would like the opportunity to do the same with my own - if only be her returning the 50% of thlump sum she has received.

Any advice would be welcome

Varous comments

1. Your pension being in payment makes it more valuable than a pension yet to come into payment (as you're getting cash now).

2. Your STBX's higher salary may not convert to a higher pension, usually the maximum pension is 2/3rd final salary.

3. However to reiterate a favourite theme of ours "don't trust CETV's", or CEB's for that matter. Get a proper actuarial valuation.

4. Your argument for a share of the lump sum is, in effect, just asking for a share of the pension asset. I think it will just be treated as part of the division of assets. Sorry

Hi Brian,

thanks for your comments re: "pensions in payment". However I would appreciate your futher views on a couple of points:

a) my wifes predicted pension will (unless she takes a significant drop in salary) be higher than mine already in payment and will yeild a significant lump sum.

b) I understand your point about the penion fund being just one of the assets of the marriage but we have already agreed a division of the more liquid assets (cash, cars etc). The only assets therefore that is up for discussion is the house and the pensions. Given therefore that my pension is already in payment, my CEB has no future value as it already a revenue stream. My wifes pension however has a future value which (working the on "had the marriage survived" principle) I would have benefitted from.

It just seems a little unjust that she has already benefitted from my penions payout and yet I have no claim on her future benefit.

Am I being naive?

Dave

1. It just sounds as if your wife's CETV is under-estimating its true value. Is it a state scheme? These under-estimate vs our basis by at least 50% normally.

2. If you've left pensions to the end your options are limited. Both your pension in payment and her pension count as pension assets and should be divided between you. Little room for trading unless you want to reopen negotiations on other assets. (Note for others reading - don't leave pensions to end).

3. Pension income and the lump sum you've already received will now either be cash or have been spent, either way it's effectively been included in the division of the rest of your assets and split between you both.

I've learnt not to comment on what is just or not, but I hope this helps the understanding at least.

BTW it's Nigel not Brian

Hi Nigel (please don't ask me where I got Brian from!) - thanks for you reply.

I have come across a case on Google (Martin-Dye .v. Martin-Dye) which seems very similar to my own situation (apart from the amounts involved)

In the case the husband, like me had a pension that was in payment whereas his wife's was not. If I understand the case correctly he argued that to take his CEB as a transferrable asset was incorrect and amounted to 'double counting' as the pension he was drawing was classed as an income stream which had also been taken into account.

I understand that he won his appeal and was granted an offset of his wife's CETV against other assets.

This really does seem to reflect my situation and would welcome you views on this

Regards

Dave