Your
Money
PENSION SPLITTING ON DIVORCE The Forces Pension Society addresses the Sticky Issue
D
ivorce is, sadly, becoming ever more prevalent within the Forces community, and the RAF suffers
no less that the other two Services. It frequently leaves the non-RAF member of the partnership feeling isolated financially as well as emotionally.
When it comes to dividing up the assets of a marriage, the Service pension can often be the single most valuable item but the non-serving spouse, although a potential beneficiary, is unable to gain a personal valuation.
Below is an extract from a typical telephone conversation regularly fielded by the Forces Pension Society help desk. For ease we will call the non-serving member of the marriage Jane.
Jane: “My husband has left me; a friend told me I am entitled to half of his pension, is this true? FPS: “Not necessarily. However, the value of his pension must be considered as part of your marital assets when it comes to dividing your marital worth between you and your husband at the point of a Decree Absolute, just as any pension you own must be valued”. Jane: “So I might be entitled to more?” FPS: “Possibly. You might also be entitled to less.” Jane: “How will I know?” FPS: “First, your husband must write to the Service Personnel and Veteran’s Agency in Glasgow and ask them for the Cash Equivalent Transfer Value (CETV) of his pension. This will tell you both the value his pension is deemed to be worth for negotiating purposes.” Jane: “How long will that take?” FPS: “Usually three to four months. The calculation is complicated, and given the impact it can have on a divorce settlement, it is very important that it is accurate. Your husband will have to pay a fee for production of the CETV, this is currently £150 plus VAT.” Jane: “What? He might not want to ask for one if that is the case. Can I get one?” FPS: “No you cannot. CETVs can only be issued to the individual to whom the pension relates, or their legal representative.” Jane: “Do we have to have one of these CETV things?” FPS: “Yes you do; and it is in your interest too; for two reasons. First, you may discover that other assets within your marriage, eg capital
28 Summer 2009
in your house, assets within the house, your own private pension, car etc, arrive at the same value of your husband’s pension. If you have agreed to share the assets of the marriage on a 50/50 basis, you might consider it sensible to keep everything else in the marriage except your husband’s pension. That keeps all elements intact (no expensive legal fees needed for selling the house etc), and is less heartache to administer, and the result is that you have your 50/50 division of your marital assets. “Secondly, I know of one case where a Serviceman decided he would not bother to get a CETV. The procedure of divorce became more bitter as it went on, to the point that he and his wife could not agree to a financial settlement because he assumed he was ‘Going to lose 50% of his pension anyway’. The Judge decided that in settlement his wife should be awarded 75% of his pension! You might like to point this out to your husband if he becomes a little difficult over obtaining the CETV.” Jane: “So I suppose it would be sensible for him bite the bullet, pay the money and move on, wouldn’t it?” FPS: “Yes it would. You might even consider offering to pay half of the costs associated with obtaining the CETV and administering any Pension Sharing Order that may be issued later, to encourage him to apply sooner rather than later.”
If you are facing a similar situation or want help in understanding the rules and procedures about any aspect of an Armed Forces pension, you can contact the FPS on 020 7820 9988 or visit its website at
www.forpen.org. There is also more information on the RAF FF website at:
www.raf-ff.org.uk
There are three Armed Forces Pension Schemes for members of the Services:
AFPS 75 (Armed Forces Pension Scheme 1975). Introduced in 1975 this scheme was closed to new entrants on 5 April 2005.
AFPS 05 (Armed Forces Pension Scheme 2005). This scheme was opened on 6 April 2005. From that date those joining the Regular Armed Forces were eligible to become members of the AFPS 2005. Members of AFPS 75 were given the opportunity to transfer to the new scheme (this offer has now expired).
RFPS (Reserve Forces Pension Scheme). Also introduced on 6 April 2005 for those joining Full Time Reserve Service. Members of AFPS 75 – FTRS (Full Time Reserve Scheme) (part of AFPS 75) were given the opportunity to transfer to RFPS from this date.
Pension Administration Service pensions are administered by the Service Personnel and Veterans Agency (SPVA) at Glasgow. SPVA address is: SPVA, JPAC Enquiry Centre, Mail Point 403, Kentigern House, 65 Brown Street, Glasgow G2 8EX. Telephone: 0141 224 3600 Freephone: 0800 085 3600 Mil: 94560 3600
The Armed Forces Benefits, and Pensions Calculator (ABC) The Pension Calculator is a facility for you to see your likely pension entitlement. It is for guidance purposes only and is not intended to provide you with financial advice but is an interesting exercise never-the-less.
www.raf-families-federation.org.uk
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48