What is a pension expert and why might I need one for my divorce?

Pensions are all too often overlooked or not considered carefully enough when a couple divorce or dissolve their civil partnership.

Pensions can be very valuable assets and often they can be more valuable than the family home or, more often than not, the second most valuable asset a couple own after the value of their home.

As part of getting a divorce or dissolving a civil partnership it is important that full financial information is provided about what assets there are, where they are and what are they worth. Detailed information also needs to be provided about everyone’s income position and as much information as possible about the pension assets. We often ask the pension companies to provide something called a “transfer value” although it should be said that for certain types of pensions this may not be an accurate reflection of what the pension is actually worth.

It is also important, depending on people’s ages, to obtain something called a state pension forecast so that you can see whether your contributions are up to date or can be topped up to provide the full state pension entitlement at state retirement age.

Given that the values for pensions change over time and there are many different types of pensions, complex calculations may be needed to determine whether they should be divided between you and your spouse or civil partner, and to what extent they should be shared to ensure fairness.

Lawyers, Mediators and Judges cannot do these calculations. To do this, you need to instruct a pension actuary who will be an expert on pensions. They will be able to consider the pension valuations and prepare a report setting out the options for sharing or any other options that might be worth considering. The report can be used to negotiate a fair agreement about how the pension assets should be treated. Pension assets can be physically shared now, in differing percentages, so that the other person, who does not own the pension, can be allocated a percentage of it which is then put in their own name and over which they have total control moving forward.

In July 2019, the Pension Advisory Group published a report called “A Guide to the Treatment of Pensions on Divorce” (the “PAG Report”).The report can be accessed using this link -

https://www.nuffieldfoundation.org/sites/default/files/files/Guide_To_The_Treatment_of_Pensions_on_Divorce-Digital(1).pdf

The PAG Report is very detailed and is an important reference tool when making decisions about pension sharing. It provides guidance about pension expert reports and indicates situations where a report may not be required.

When couples meet with us in the mediation process, we will be able to guide them as to whether we would recommend a pension report is obtained. If we think one is necessary, we will be able to suggest experts who we have worked with over the years and who are well known for doing really helpful and clear reports to explain the important considerations in particular situations.

If you would like to know more about how mediation can help you and your partner separate amicably and resolve everything so that you can save money and avoid court call us on 0800 206 2258 or email us at hello@familymandm.co.uk. You can also visit our website and use our online booking service to book a free call to speak with us at a time that suits you – visit www.familymediationandmentoring.co.uk

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