You don't need to be an 'investor' to invest in Singletrack: 6 days left: 95% of target - Find out more
We're getting divorced so our pensions are being valued by an independent actuary who's using my ex's CETV that's dated almost 11months old. The CETV is being used to calculate equalisation of capital and ultimately pension offsetting. I am hoping to keep the house, and my ex will keep her pension pot. I have a neglible pension. The higher my ex's pension pot, the more I can retain in the house (less £ buyout for me).
Seeing the CETV is almost a year old and with interest rates having gone up by more than 4% since it was done, would I be better for the 'old' CETV to be used rather than requesting a new one to be obtained? Essentially, the raise in interest rates will value down the CETV (or so I have read).
My legal adviser does not seem to understand my request to go with the dated CETV...or maybe I am not understanding...
11 months is quite old, I'd ask for a new one.
As for whether it will make a difference or not, that depends on the pension type (Defined Benefit or Defined Contribution). With the latter, it could have gone up or down in the last 11 months...
which date matters - the value at the time of the divorce or the value at the time of separation? usually you'd expect the value of the pension to go up over time, but I have two pensions and 1 has gone up slightly and one had gone down quite a bit in the last 12 months. But you are paying professionals for advice so make them explain it to you!
My understanding is that transfer values have substantially decreased across the board over the past year.
*I work in the industry albeit no longer directly dealing with transfer work
If it’s a defined benefit pension pot then the CETV is almost certainly (significantly) lower than it would have been 11 months ago.
If it’s a defined contribution pot then too many variables to say.
I do think that even if you work on the 11 month old figures someone will request up to date figures before settling.
@ footflaps
It's a DB one and I had read that the rates impact them in value: "When interest rates increase, the CETV decreases as the value of a pension plan’s liabilities rises faster than its assets."
https://www.cjfinance.co.uk/the-truth-about-defined-benefit-pension-deficit-is-your-pension-safe/
@ poly It'll be the latest valuation just prior to getting the divorce rubber-stamped. Yes, long term the pension value will go up, but as the interest rates have an impact on gilt values, this has eroded the value of the CETV. Could be that in your case one is DB and the other is a DC pension.