How do you make pensions equal

Hi all

how do you share pensions equally?

W decent railway pension £140k
H RAF pension £66k and local pension £7k
Difference is £66k

I appreciate £ in pension is not the same as £ in cash/property

Surely It is not a case of the W paying £66k to H to bring him up to her pension amount?

or does it not work like that?

sorry this is hurting my head trying to work it out lol

The aim is to equalise either the values or incomes on retirement. This is done with a pension share. A portion of pension may be transferred out to another pension. Alternatively a pension share may set up a pension within the scheme it comes from.

The CEV of a pension does nor necessarily reflect the true value, especially where old style work pensions are involved. It is worth looking at the benefits statement to see how incomes on retirement compare.

It is possible to buy out a pension share entitlement with cash. This is called offsetting. It isn't necessarily on a £ for £ basis; a discount is often applied.

In your case pension values would be equalised with £33.5k worth of her pension or 24.9%. This would not equalise incomes.

Accurate calculations, especially in relation to equality of income need to be done by an actuary.

Hadenoughnow

Thank you so much. So an actuary is the way forward then?

If you want to get an accurate picture then yes. Bear in mind the costs though. You may want to reach a compromise based on values and see if a judge is happy with it. This approach is acceptable when funds are fairly small (£100k or less). Remember that public services pensions are also pretty valuable.

Hadenoughnow

Hi had

Yes that is what I am trying to put together. An offer to see if this can be settled before court, but I honestly have no idea how much to offer.

Any ideas on what I should offer?

I am afraid that really is above my pay grade ?.
One approach may be to just add everything together, divide by 2 and see how much you need as a balancing payment to make things equal. As above though this doesn't mean what you will get is fair because of the difference in the types of pensions.

Pensions cannot really be looked at in isolation. The whole financial picture and your respective needs have to be considered.

Hadenoughnow