Government Changes in public sector pension valuations may affect your divorce

If you, or your husband or wife, are employed in the public sector, your rights on divorce may be affected by a change in government policy. 

On 26 October 2011 HM Treasury released a Guidance Document that requires all Public Sector schemes to use a different discount rate for determining Cash Equivalent Transfer Values and with immediate effect. In divorce and dissolution matters these valuations are more commonly referred to as Cash Equivalent Values (CEVs).

The courts in divorce proceedings use CEVs to decide how to share pension entitlements. The Courts can decide to give one party a share of the income (earmarking), give them a share of the capital (pension-sharing) or off-set the valuation against other assets.

In each case there is a need to establish the value, which is usually done by the pension fund itself, by providing a CEV.

Those schemes are currently almost universally suspending the provision of CEVs while implementing the new policy. It remains to be seen what effect the new guidelines will have on valuations.

In the meantime you may find it necessary to wait before implementing any planned pension order in divorce. On occasions it may be worth obtaining an independent pension valuation through your solicitor, as pensions are often now one of the biggest assets in the marriage.

Mostyn Evans is a Solicitor and Director at CVC Solicitors with offices in Penzance, St.Ives and Hayle.

Laura Hockett

Laura has recently passed her first year of her level 3 ILEX exams. The subjects included:-

• Introduction to Law and Practice
• Contract Law  
• Civil Litigation   
• Client Care Skills

She is continuing with her studies at Cornwall College which will eventually lead to her being  a fully qualified member of the Institute of Legal Executives.