I had a divorce in 2012. My FDR is coming up. Pension Actuary calculated pension equalisation calculation recently with wrong retirement age assumptions for Ex-wife at 60 (W), i.e. (65(H), 60(W)). Normal retirement age is at least 65 (66.5 for W, DOB November 1957). I was made redundant in July 2014. Few weeks later she left (resigned) from her college lecturer job in July 2014 also, bit of a coincidence! During the first court hearing, my counsel and the other solicitor after long discussion jointly agreed that both retirement age should be considered 65 (I have a copy, now shown to the other solicitor). The letter of Instruction from the solicitors to the actuary forgot to mention this important point, i.e. there were no mention of retirement ages. The actuary assumed my ex-wife's retirement at 60. But she can work for at least upto 65 (in fact 66.5, DOB is November 1957). The other solicitor is not agreeable so far to do supplementary calculation from actuary. My solicitor cited Part 25, 25.10. By inspecting the regulations, it seems 25.10. 1(b), 2(a) is applicable for our case in my opinion. Please check this with Ms Jones & Mr Starks 'A party may put written questions about an expert's report to a joint single expert and the questions are to be proportionate and within 10 days of the report. My understanding of Proportionate questions are: i) that the questions are reasonable and fair, as the questions highlight the joint agreed assumptions by the other solicitor & my counsel on the first hearing date (1 December 2014). iii) Questions are associated to rectify the wrong assumptions used by the actuary in his calculation. These incorrect assumptions should not have been used in the pension equalisation calculations by the actuary. As there is a shortfall noted in the assumptions, further subsequent calculations are necessary for true pension equalisation before the court. Noting, that these calculations should be simply repeating all the data with few tweaks, i.e. changing 60 to 65 for W, should not be onerous for Actuary and our questions are proportionate. iv) Correct assumptions are mandatory in order to do the pension equalisation calculations fairly and correctly, without prejudice to any party. v) the calculations with correct assumptions are only acceptable to court, ir order for the court to come to correct decision on pension equalisation. • To answer proportionate question is actuary's responsibility (Regs 25.10. 1(b), 2(a) ). If to answer a proportionate question requires a supplementary calculation then that should be done by the Actuary, and should not need a court order. • The regulation 25.10, never implied that to reply to a proportionate question from a party, further supplementary calculation to answer the question, will not be required by the actuary or will not be required by court or not to be allowed by the court. Because this is the only way for the court to review the Pension equalisation correctly and fairly. • Hence the actuary is obliged to do supplementary calculations (please see Note 1 below) with correct assumptions which were agreed by both parties other solicitor & Counsel on first hearing date (December 2014), at the court hearing at Court. f) if it is informed to judge and proved that the assumption used by the actuary is wrong, because the joint agreement on the first hearing date 1 December between my counsel & other solicitor is compromised, then the FDR will most likely fail in terms of pension equalisation and for overall FDR , and a further FDR2 may be ordered by court. The above has a high probability of risk associated with high consequences, e.g. cost implications. Note 1: The actuary wrote: I am however not able to provide supplementary calculations and advice where the question was not in the joint instructions – any supplementary questions need to be put in joint supplementary instructions before I am able to deal with them. For the avoidance of doubt, a question about sharing for equal income from ages other than those agreed based on the original instruction letter is in my opinion a supplementary question and not a question of clarification. My reply: But the joint original Instruction letter did not have any instruction (i.e. it omitted completely on retirement age to be assumed by the actuary , hence it is not a suplementary question. The assumption on retirement assumed is wrong. If to answer a proportionate question requires a supplementary calculation then that should be done by the Actuary, and should not need a court order. Thanks & Regards ***** *****
Yes, I am prepared to wait few days.
There are few points I would like to add for the understanding of the problem, is that o.k.?
How do I edit?
1) The current status is my solicitor is preparing for a court order because the other solicitor is still disagreeable for further actuary calculation with Ex-wife's retirement age 65.
The other solicitor could not quite remember the conversation with my counsel on the first hearing date! We have the written evidence from counsel. I presume the other solicitor also took notes.
By law is it possible to get that note? We sent our counsel note to the other solicitor.
My solicitor wrote to the other solicitor that we have the evidence on joint agreement (sent a copy), and if the court accepts our point to revise calculation by the actuary, then all comensation has to be paid by them. The risk is there for them. But nothing much happened.
The letter of Instruction to the actuary: both solicitors forgot to add retirement age assumption for the actuary's calculation.. The actuary asked my last solicitor, but she did not reply. The actuary assumed 60 for Ss retirement age without explaining the possible consequence to me . Is this correct action for actuary to take or assume? Surely there should have been a reminder to my solicitor and advising her the possible effect in the results for different retirement ages of Ex-wife either at 60 or 65?
2) I am divorced on 1 June 2012, re-married on 11 August,2012, i.e. few months later. I asked a question to the actuary, and he replied as follows:
For the money-purchase SIPP, all accrual and contributions were before June 2012 – the change in CETV between then and now is a result of (passive) investment growth. The pension which will be payable on retirement has not changed in its essentials – it is the pension which can be bought from the underlying investment assets after whatever investment growth is actually achieved.
Yes all the contributions were before June 2012, but quite a lot accrual happened after June 2012, which is the investment growth, accruals due to dividends etc.
I am responsible to S (Ex-wife) upto June 2012, and responsible to my wife (P) from August 2012. Hence any accrual benefit for the above (post June 2012) investment growth including additions of dividends etc. after June 2012 should not go to S's favour but to my wife's favor surely?, otherwise my wife will miss out from my accrual benefit.
After the divorce S lost her right to claim on any growth of my pension fund after June 2012..
Is this correct assumption?
If P goes to court and complains that any accruals for husband after 11 August 2012 should be in her interest, not S's, what the court will say?
Example: Suppose I had £1000 in SIPP pension in June 2012 and it is increased to £1300 now.
Let us assume financial settlement with S is resolved just before June 2012.
In this case could S claim any benefit from my pension accruals after that settlement date/ divorce date? The answer is likely to be 'NO'?
Because the financial settlement did not happen after divorce until today, it should not mean that she can claim or deserve a 'second bite at the cherry'. This is the important point.
Surely the actuary knows that I have remarried to P in August 2012, few months later the divorce in June 2012. Why the actuary is not prepared to consider my wife?
Suppose I had £1000 in SIPP pension in June 2012 and it is increased to £1300 now.
I think for pension sharing I have to give away to S £500 to her pension fund (50%) as was at the divorce date (June 2012). And after that date remaining pension pot £500 + any increase or decrease is my pension pot. Is this correct assumption?
3) The actuary assumed 8% growth in 7 months for some of my pension funds. They look very high. Sometime funds go down as well. Possibly in average 5% growth can be assumed?
4) Our FDR date is very near. If the court order is done but the actuary can not complete the calculation with Ss retirement date updated to 65 then what happens at the FDR date? What will be court decision?
Will they say further adjournment or give a direction such that actuary does the calculation and both party agrees that calculation slightly at a later date when the pension equalisation report is issued.
I am assuming court will give clear direction during FDR.and the pension sharing will be sorted between solicitors as updated report is issued?, assuming other financial bits are sorted?.
How long I have to wait?
Dear Clare 21 June, 2015
a) There was a joint agreement between two sides (my counsel & the other counsel) on the first hearing date, which was to consider retirement ages for both to be 65. I have my counsel's note as a proof to the court.
The letter of instruction to the actuary, drawn up mainly by the other solicitor omitted to mention this (H65 & W65).
The actuary sent a letter to my solicitor mentioning the assumption H:65 & W:60, and said if there is a different retirement age to be considered then communication to be made to him (actuary).
The actuary however did not explain the likely difference, i.e. how much extra money I have to transfer to Ex, if assumed W60 vs W65 to my solicitor..
My solicitor forgot to raise the issue to the actuary (so is the other solicitor!!) that it was agreed H:65 & W:65 during the first hearing date. The actuary used H:65 & W60 without any joint agreement from either sides. and issued the report.
I am sure the actuary wrote the same letter to the other solicitor, so why the other solicitor kept quit?, because the other solicitor had previously agreed with my counsel on both retirement ages to be 65, not H65, W60!!
I would say that the actuary should have demanded agreed retirement ages for both in black & white, agreed by both solicitors, because the actual letter of instruction to the actuary omitted (forgot) that point.
I have written evidence that H65 & W65 was selected by both sides on the first hearing date, written by my counsel.
Conveniently the other solicitor is saying now that she cannot remember clearly the mutual agreement with my counsel. But she must have some notes taken that day!!
that my Ex-wife can continue to work past her Normal Pension Age (60) and accrue benefits up to age 75.
You wrote: 'Your ex is entitled to a share of your pension. This will include any proportionate accrual which has arisen since 2012. So if she was entitled to 50% then she will be entitled to %0% of the amount accrued since 2012. Your new wife only has a claim on YOUR share of the pension - whatever that percentage turns out to be'.
Not sure what you meant by mentioning % 0% etc. ?
Question: Supposing my pension pot was £300k in 2012 (divorce date) , increased to £400k currently, and I put in new money of £20k after 2012 (divorce date), then what happens for sharing pension?
I look forward to hearing from you shortly.
Thanks & Regards