Introduction
Serving police officers, armed forces personnel, fire & rescue and prison officers who continue on service could retire early with an immediate pension. The value of this pension is significantly greater than that if they left service, as assumed by the CETV. Therefore the value for a uniformed service pension in a divorce can be significantly understated by the CETV and an appropriate valuation of 3 times the CETV value is not uncommon.
£50 Uniformed Services Report
The off-line actuarial Uniformed Services Report costs only £50 (Excl VAT) per pension scheme valued. It is produced manually and signed off by an actuary, is returned to you in only two working days and includes a reconciliation to explain the major reasons for the differences. You can then discuss the findings of the report with your solicitor. There is no reason why you should not run a valuation on pensions worth less than £30,000, other than the fact that the likely difference in values may not justify the small cost.
Police Force example
The following is a case study example based on the police defined benefit (final salary) pension scheme.
| |
Rank: |
Constable |
| |
Born: |
1970 |
| |
Scheme: |
Police Pension Scheme 1987 |
| |
Started service: |
1995 |
| |
Date of leaving service: |
After 25 years service |
| |
Valuation date: |
April 2006 |
| |
Current pensionable pay: |
£30,844 |
| |
£50 Uniformed Services Report: |
£191,000 |
| |
Cash Equivalent Transfer Value: |
£65,000 |
| |
Difference |
£126,000 |
| Reconciliation of differences: |
| |
CETV |
£65,000 |
| |
Allowing for pay increases up to retirement increasing final pensionable pay, as opposed to statutory increases in the CETV |
£51,000 |
| |
£50 Report assumes pension payable from age 50, not from 60 |
£48,000 |
| |
£50 Report using latest mortality assumptions |
£12,000 |
| |
Other differences |
£15,000 |
|
|
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