Why you should independently value your Spouse's Pension Benefits?

As Independent Financial Advisers in the matters of pensions and divorce, we fully accept and indeed welcome the encouragement to use the cash equivalent transfer value (CETV) as the starting point for pensions valuations in divorce negotiations and the finishing point for the expression of Court Orders.

Alternative Valuation Methods – Under Valuation

The Court is not barred from considering alternative valuation methods and, indeed, maybe encouraged to do so in respect of attachment orders (where the CETV is an inappropriate valuation method) and pension sharing (where the value of the pension credit to the spouse will usually not be known until many months after an Order is made).

Moreover, there are a significant number of circumstances in which the CETV will clearly and significantly under value the pension scheme member's rights (for example, in respect of employees of the Armed Forces and the Emergency Services). Here, alternative independent valuations should categorically be considered, not least, as the values of these pensions tend to be considerable. Therefore, it may be useful for either both sides or ultimately the Court to be aware of independent assumptions which may indicate an unfairly low valuation of the pension scheme member's rights within the CETV.

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