Pension CETV's have recently been in the news due to the extremely long wait teachers are experiencing in obtaining their CETV figures from the Teacher's Pensions scheme. The delays mean that many teachers are not able to obtain a Final Order in their divorce or reach a final financial settlement. The delays are frustrating and are causing divorcing couples additional emotional and financial strain.
This will understandably lead many to question, why should I bother getting a CETV if it means my divorce will be so delayed?
We will look at the reasons why pensions are an essential asset not to be overlooked, even if you may have to wait longer than expected.
Pensions can be shared on divorce, just like any other asset. Pensions are often one of the most significant assets in a marriage and they are sometimes more valuable than the family home.
When looking at how the assets should be divided, the most important thing a court would consider is how the parties' financial needs can be met, both now and in the future. This includes someone's financial needs on retirement.
It can be quite common for one person to have a larger pension than the other, particularly if one person has been out of work for a period of time, for example if they have had a career break or worked part time when caring for children. Some pension funds are also more valuable than others, for example teachers, NHS workers and civil servants often have more generous schemes compared to the private sector.
Most pension funds would be considered a matrimonial asset, regardless of when or how much each person has contributed. If a pension is required to meet both parties' needs on retirement, it is unlikely to make a difference if a significant amount of that pension was accrued before the relationship began.
Your family lawyer will ask you for a CETV and you will need to disclose this to your spouse.
An annual statement is not sufficient for the purposes of dealing with pensions on divorce. An annual statement shows the current value of a pension pot at the date of the statement. A CETV is different as it will show the amount the pension provider is offering you to transfer the pot outside of your scheme.
A family lawyer or a pension valuation expert cannot give you advice on dealing with your pensions on divorce without a CETV.
Once all pensions are valued, it is likely that your family lawyer will advise you and your spouse to obtain a joint pension valuation report from a pension expert.
Expert advice is often required at this stage to provide the most accurate calculations as the underlying benefits of a pension scheme can be much more valuable than the CETV given (particularly in public sector schemes).
A pension report will look at several options for dealing with your pensions, including:
Much is in the hands of the pension provider.
However, some things you can do are: