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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 07-26-2017, 03:11 PM
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Default Pension division question

I was wondering if anyone could shed any light on this.

Ex started a union job a year after we married. We separated approx 12 years later. The pension is a defined benefit plan.

We're finally about to divide the pension and he wants to offer a buyout. Rather than pay the actuary (approx $700), he got his pension statement from our year of separation and wants to make an offer based on that statement.

Does anyone know how big of a difference there would be between a pension statement and the actuary's calculation? Thanks for any insight.
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Old 07-26-2017, 11:31 PM
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Originally Posted by Snowstorm View Post
I was wondering if anyone could shed any light on this.

Ex started a union job a year after we married. We separated approx 12 years later. The pension is a defined benefit plan.

We're finally about to divide the pension and he wants to offer a buyout. Rather than pay the actuary (approx $700), he got his pension statement from our year of separation and wants to make an offer based on that statement.

Does anyone know how big of a difference there would be between a pension statement and the actuary's calculation? Thanks for any insight.
Do you mean he provided just some sort of annual report on the value of his pension? Or did he get the pension administrator to give him the value of the pension based on dates of marriage and separation? Some pension administrators will do that for free. The first, I wouldn't trust, but the second should be quite accurate.
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Old 07-27-2017, 12:19 AM
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It all depends on the accumulated pension during work vs the admissible value during the marriage as per Family Law.

First, the Actuary will determine the Primary Value of the Pension and then the Value for the purposes of family law. The primary value will be higher and that will be the amount stated on that statement. (for example, the value on my statement was 11200$ higher than the value to be divided).

The other thing to consider is the amount to allocate for income tax. To arrive at this amount, the actuary has to calculate several possible scenarios taking into account the possible retirement ages normally 55, 60 and 65 years and to come up with a theoretical value. Then, based on the pension plan, he must estimate the probable tax rate of the participant at the age where he will withdraw his pension (is it 15%, 16,7%, 19,4% or 22%??).

Once the amount is established, the participant can show the net value of the divisible pension in his assets in the Financial Statement or put the gross value in his assets and the amount related to income tax purposes in the debts section. The equation will give the same results but I recommend to show both values... the gross amount and the liability.

In the end, if he does not want to use the services of an actuary who would determine a lower amount of the pension to be divided and he will not take taxes into account ... it's big sweet for you.
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Old 07-27-2017, 12:50 AM
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Do you mean he provided just some sort of annual report on the value of his pension? Or did he get the pension administrator to give him the value of the pension based on dates of marriage and separation? Some pension administrators will do that for free. The first, I wouldn't trust, but the second should be quite accurate.
When he got his pension statement for 2016, he asked for a copy of the one he received in 2013 when we separated. I believe it's just a statement of his own contributions of the years to date, and he's pushing me to take a settlement based on that amount. I noticed afterwards that in small print it says that the company matches his contributions 100%, so I believe the total 2013 amount is double what he's showing me.

My instincts are telling me to go through the proper channels with the actuary, but I don't think he'll like that idea.
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Old 07-27-2017, 09:30 AM
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When he got his pension statement for 2016, he asked for a copy of the one he received in 2013 when we separated. I believe it's just a statement of his own contributions of the years to date, and he's pushing me to take a settlement based on that amount. I noticed afterwards that in small print it says that the company matches his contributions 100%, so I believe the total 2013 amount is double what he's showing me.



My instincts are telling me to go through the proper channels with the actuary, but I don't think he'll like that idea.


My employer also mattes my contributions but the statement shows the total in the account. I don't believe you receive two separate statements. Would you be willing to pay half the cost of the evaluation since you will be getting basically half the pension? That may be a better way to do it to ensure you get correct numbers. But as stated above you may come out with less than what he is proposing


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Old 07-27-2017, 09:42 AM
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I think you would be best to use actuary. Guestimating is rarely prudent. You don't know how long or how nasty your litigation will be.
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Old 07-27-2017, 12:10 PM
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Would you be willing to pay half the cost of the evaluation since you will be getting basically half the pension?
Absolutely I'd pay half. I'll likely have to pay the whole thing as he doesn't think it's fair that I'm entitled to any of it.
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Old 07-27-2017, 12:16 PM
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I think you would be best to use actuary. Guestimating is rarely prudent. You don't know how long or how nasty your litigation will be.
I think you're right about using the actuary. Thankfully we made our SA together 4 years ago and have been following it amicably since then. This is the only outstanding asset that needs to be divided. I've been afraid to rock the boat with it so far, but now he's initiating it so hopefully it will go smoothly!
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Old 07-27-2017, 02:32 PM
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Absolutely I'd pay half. I'll likely have to pay the whole thing as he doesn't think it's fair that I'm entitled to any of it.


I wouldn't pay the full amount... I would request the cost to be split... he shouldn't get out of paying for it just because he doesn't want to.


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