Anyone know more about CETV calculations being suspended by DWP/SPVA

[Been There...]

I am in the process of trying to get a Cash Equivalent Transfer Value (CETV) for the upcoming divorce paperwork. I put the application in 2 months ago and last week got a letter (minus the invoice I needed). Rang JPA who said that the CETV processing had been stopped by the DWP because of some anomalies in the way they have been calculated.

Unfortunately they didn't know any more nor did they know how long the suspension was going to take.

Anyone heard anything?

Invoice arrived yesterday so will be sending it off tomorrow and hoping that they have already calculated it and can send it out.

Regards

[Been There...]

Spoke to JPA today and the lady read out an email that DWP had sent to them and also a 'if caller asks for information' bullet point.

Seemingly the 'rules' changed about how CETV were calculated on 1 Oct 08 and there has been a stop put on all current CETV calculations and notifications. If you have paid for one and are waiting for the paperwork to come through, you should have received a letter explaining it all; as I haven't paid yet I haven't received anything.

They did not know how long the delay would be but said that if you had a court case very soon, to raise a SR through JPA.

Regards

[Al R]

The 1 Oct changes that they are referring to relate to ‘Protected’ and ‘Non Protected’ rights. Being in the MoD pension scheme, you automatically agreed to contract out of the State Second Pensions Scheme or S2P (used to be called the State Earnings Related Pensions Scheme or SERPS) which people could buy into to top up their pension. The thinking was that the MoD pension was good enough without you taking even more benefits at public expense.

In this case the ‘Protected Rights’ are the value (in lieu) of the benefits from the S2P/SERPS part of your MoD pension and the ‘Non Protected Rights’ are the value of your MoD pension that either you or your employer contributed to your old pension scheme that had nothing to do with the S2P/SERPS in lieu bits.

With regards to your divorce, are you earmarking or offsetting? What might be the only thing affecting you is that the main difference between ‘Protected’ and ‘Non Protected’ is only really apparent if you are married when you choose to take benefits, and from the sounds of it, you won't be. Any annuity that you buy from your ‘Protected Rights’ element must be on unisex rates, must include a reduced income for your partner, and include a guaranteed minimum payment term in the event of YOUR early death. Like I said, as you won't be married, this wouldn't apply to you.

I don't know what JPA is up to - these changes have been long known about. Actuaries and fund managers can generate a fund transfer value in about 2 weeks. If they were operating like that in the real world, JPA would be out of business in 2 minutes. Good work if you can get it..

[Been There...]

Thanks Al. I will await the letter. You are correct, I am not planning on being married when I take my pension so I do wonder what all the 'fuss' is about.

Regards

[Al R]

.. then you might like to amend that 'death in service' nomination too. :suspect:

[SirPeterHardingsLovechild]

By co-incidence, my Final Hearing is tommorrow, Tuesday morning.

I have a CETV from September and her solicitors (who don't miss a trick) have been banging on about the CETV and have asked for an 'Independant Actuary' to inspect the figures. They are requesting an (expensive) adjournement on this, and another separate ground.

I am none the wiser, fingers crossed it'll all be sorted tommorrow

[SirPeterHardingsLovechild]

I can't answer the question that started this thread, but I found out more information at court today that may explain it. I'll keep it simple.

The CETV gives a figure for the cash pot that funds your pension. The figures that Glasgow have been providing have been proved to be wrong on the low side. And her slice comes from that cash pot (which you wave goodbye to forever)

This can affect you in one of several ways:-

1. They will ask you to agree to an independant actuary to work out the correct cash required to give her an income equivalent to her fair share

2. They will blackmail you into giving her a larger percentage of your pension that you thought she might get, in order to get this income.

3. They will blackmail you with the threat of an adjournement to a full hearing unless you agree.

4. All of the above.

There is more to tell, but its complicated.

Not very satisfactory. When my brain has settled down, I'll be writing a letter!

[Been There...]

Great....

Hope you get things sorted. I sent my cheque off today....

[Al R]

Peter,

You might find this light bedtime reading useful.

Glossary UK | compulsory purchase annuity, CETV, clean break (http://www.sharingpensions.co.uk/glossary4.htm#text12)

Divorce UK | valuations | CETV Method and pension benefits (http://www.sharingpensions.co.uk/valuations.htm)

Many respondants and applicants don't think to ask their solicitor about pensions legislation to this degree upfront. Therefore, most solicitors don't have to understand stuff like GN11 actuarial devices and consequently, neither do many aged judges. Given that the overworked system focuses on the children (rightly so of course), the finer points of pensions legislation get overlooked. It'll depend on how acrimonious the split is and the sum involved, but this is how we are going. Soon, divorce will be as heavily weighted with people like these as it is with childcentric solicitors.

Spence & Partners (http://www.spenceandpartners.co.uk/)

[jim2673]

No idea but my ex managed to get the judge to order a independent actuary valuation of my pension benefit.
2 years away from 22 year point OR7 pension was valued at just over £250K(2007 figs)
Luckily i had been offered 5 extra years which brought it down to £200K
Married for 8 years Ex took 92% of equity in FMH, and no spousal maintenance as a clean break.no claim on pension or gratuity.
Judge ordered sale of FMH, house sold June this year, she has rebought in June for £193,000C/o house pirices crashing bigger and better neighbours for sale @ £169,000, might go for £140,000 if lucky..
Must add she walked out of court with £18,000 less than i had offered her when she kicked off.:D

[halfamoth]

Take care with those figures, I employed a very good barrister and actuary who revalued the share and my ex walked away with under a quarter of my pension pot rather than the half she expected. It is far too complicated for a simple navigator like me to explain but your solicitors should be able to find someone to do so. The 'expensive' adjournment may prove to be a life saver. My ex nearly self destructed when she got what she asked for then discovered it had just cost her the thick end of 100K!!!

[danieloakworth]

A very timely thread. Am also in the process of divorcing, only difference is that I left the Service 5 years ago so am in receipt of my pension (I am 44). Am I correct in taking the stance that as it is now 'in pay' the pension no longer has a CETV? Anyone got experience of how the courts deal with such situations?

[Argyll]

I understand from someone in the know that SPVA had some trouble getting the figures required for the new CETV calculations from SP Pol/Government Actuaries. Most of the information required has now been received and the process of updating the computer system used for the calculations is underway. SPVA were able to use calculations done under the old system until some time in Oct, but now not legally permitted to provide anything but the new version of the calculation. Understand all will be back to normal regarding CETV calculations by 31 Dec 08.

[Al R]

Daniel,

Its a pension in payment, and not a pension with a promise of payment, so yes, it has a tangible value although there are rules which need to be applied as its not a normal pension in payment or in drawdown. JPA: 0800 0853600

Half,

Time spent in reconnaisance. Do it on the sly beforehand and then you'll know if to fold or call. :suspect: