Date of pension valuation

When I obtained my CETV, it was calculated at the current date (May 2008). In fact the separation had occurred 15 months earlier. My interpretation of the final pension accumulation is that the CETV will have increased around 10% in that period, even though it is only 15 months extra in ~24 years service.

Should I re-request a CETV for the date of separation?

Thanks

Kalamari

(Pension questions require at least 3 smilies!)

What you have experienced is a glimpse at one reason why a CETV is an inappropriate valuation. CETVs are calculated on the assumption that the member has left service, apparently, like many in this situation; you are still in service and therefore continuing to accrue benefits.

Two issues are likely to have increased your CETV over the 15 months between your date of separation and the date of the CETV calculation. The one that I suspect you are thinking of (forgive me if I am wrong) is that you have a further fifteen months of reckonable service in the scheme. Another is that if you have benefited from a pay increase over this period then this will probably have increased the value of the pension as well.

If you do request a CETV as at the date of the separation, you will almost certainly have to pay for the valuation (you are only entitled to one valuation free of charge in any twelve-month period). Unless you are divorcing in a Scottish court (in which case only the pension accrued during the relationship is taken into account), it is questionable whether you and your lawyer will be successful in arguing that the lower CETV should be used. You run the risk of spending money on another scheme CETV, having your lawyer argue the point only to have the court order that an independent actuarial valuation is required. In which case, you would probably have to pay 50% of the report cost to receive a valuation that is probably even higher than the scheme CETV that you already have.

Sorry about the lack of certainty and the almost certain reduction in the “smilies” count.

Peter.

If you get an agreement for a CETV calculated at date of separation does that overrule the pension scheme's entitlement to choose a valuation date within the 4 month period after they get the pension sharing order ?

Maggie

The simple answer is No.

Peter

Sorry Maggie, I just couldn’t resist the temptation for what was possibly my shortest ever wiki post.

The possibly more helpful answer is not so simple.

In implementing a pension sharing or attachment order, the scheme is obliged to use the “relevant date”. In EW & NI, this is the date of the Decree Absolute. The scheme has up to four months in which to implement the order; neither the scheme nor anyone else can change the “relevant date”.

In agreeing a particular pension share, account can be taken issues such as the date of separation, lump sum commutations, early retirement dates and all the other complexities that can arise. Typically, these calculations are done by an actuary and form part of the pension sharing report, if the actuary is instructed accordingly.

offsetting does not involve the pension scheme at all, so any “adjustments” calculated by the actuary (or anyone else) can be incorporated in the calculations.

There, that’s another “smilie" gone, we must be heavily into “frownies” territory now.

Peter.