bbl family law
Finances

Public Sector Pension Calculations

9th January 2012

Many divorcing couples are currently facing delays to their divorce proceedings as a result of the Government's reforms to the way public sector pensions are calculated. The changes in the methods of calculation remain in dispute resulting in couples not knowing the true value of the marital pension pot, or what pension might be received/retained as part of their divorce settlement.

The reforms affect all public sector pensions including, NHS workers, teachers, civil servants etc. The Treasury is reviewing criteria including life expectancy and the likelihood of paying a dependent's pension.

It is important that correct information is known about a couples finances before the court is able to make/approve an order. This includes all financial information including; capital assets, income and pensions. Without full information the parties, and in turn the court, cannot come up with a fair and reasonable outcome.

With pensions on divorce the courts need a figure known as the "Cash Equivalent" value of the fund. However with the current reforms to the calculation process there is some dispute as to the appropriate method of calculation, which can in turn significantly affect upon the Cash Equivalent value given.

Until a resolution has been reached it seems that further delays for some couples are inevitable.
 
Finances

One woman's reasonable is another mans unfair...

18 November 2011

The Court of Appeal has recently awarded a wife (aged 55) a divorce settlement of over £4 million consisting of; a former family home (a nine bedroom country house worth in the region of £2 million), £75,000 to renovate the property, an additional lump sum of £1.65 million and £75,000 per year in child maintenance.  The order was made so as to meet the wife’s “reasonable needs”.
The award followed a 26 year marriage during which the parties had five children, now aged between 15 and 25.  The parties’ wealth was mostly inherited by the husband, and in total their assets were approximately £12 million.
The husband thought that this figure was too high taking account of the source of the money, and took his case to the Court of Appeal.  The Judge in the Court of Appeal stated that the wife “has to have her needs met”, and that the question of what these needs were valued at was a matter of “discretion”.
Although this case is quite exceptional due to the amount of money involved, the principles applied by the Court in reaching their judgment are not unique.  The court has wide powers and discretion when dividing matrimonial finances.
Especially in cases where there has been a long marriage, there is a strong presumption that the capital assets should be divided 50/50.  This division however must meet the “needs” of the parties.  Any specific contributions that were made, or brought to the marriage, by one person or an inheritance received can then be brought into the equation as a means to depart from the 50/50 division.
It is unlikely however that this will be possible if the parties “reasonable needs” cannot be adequately met without recourse to these contributions/inheritances.
In this instance the wife did receive less than 50% of the total assets due to the wealth being received from the husband’s family, although the award she received should provide her with a comfortable lifestyle.
 
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