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Pensions & Divorce

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An overview of our approach to pensions & divorce

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Pensions & Divorce

  1. 1. Pensions & Divorce<br />Phil O’Connor<br />Director<br />Whitewell Financial Planning Limited<br />
  2. 2. Agenda<br />Need for advice<br />Examples – what to watch for<br />Our process<br />Case studies<br />Summary<br />Any questions<br />
  3. 3. Need for advice<br />Never more true with more and more complexity<br />Law Society & Resolution are driving the need<br />You are potentially open to claims of negligence / reputational risk<br />
  4. 4. Examples – what to watch for<br />Final Salary<br />Public sector schemes<br />Funding position of private schemes<br />Shadow membership<br />
  5. 5. Examples – What to watch for<br />Money Purchase<br />Safeguarded rights<br />Penalties / special conditions<br />Pension providers<br />
  6. 6. Examples – What to watch for<br />Other<br />Transfer day<br />State benefits<br />Implementation charges<br />
  7. 7. Our 5 step process<br />
  8. 8. Assessment & Information Gathering<br />Often find that insufficient information has been gathered<br />Often find difficulties with Pension Scheme Trustees / Managers not knowing their duties<br />Without full disclosure we may have problems later in the process<br />
  9. 9. Report<br />Work in conjunction with actuaries<br />Options – Express / Bespoke / Stand alone<br />Demystify their reports<br />Set out options – pros & cons<br />
  10. 10. Advice & Implementation<br />Review report and ensure satisfaction<br />Provide financial recommendation to client<br />Project manage<br />Complete discharge papers<br />Liaise between the parties<br />
  11. 11. Case Study 1 – Mr & Mrs A<br />Both aged 61<br />Both in good health & non smokers<br />Mr A – BP Pension Scheme – final salary pension in payment - £18,000 p.a.<br />Benefit on death - £15,000 p.a. (83%)<br />CETV - £300,000<br />Actuary advised share to be 63%:37% in Mrs A’s favour to equalise gross pension of £7,000 each.<br />No shadow membership available<br />
  12. 12. Case Study 1 – Mr & Mrs A<br />Clients did not divorce but separated<br />Mr A retained his higher pension<br />Mrs A retained her 83% benefit on Mr A’s demise<br />BP clarified this to be the case (even though legally separated)<br />
  13. 13. Case Study 1 – Mr & Mrs A<br />CETV – poor value <br />Both would have been short changed by a sharing order<br />Novel and innovative solution<br />
  14. 14. Case Study 2 – Mr & Mrs B<br />Both aged 58<br />Both in good health & non smokers<br />Mr B pensions - £1m in 4 different schemes, including an Irish pension<br />Substantial other assets <br />Majority benefits in SSAS including the land Mr A’s business was run from<br />Mrs B - £70k in SSAS and a trustee<br />Actuary advised share to be 54%:46% in Mrs B’s favour rising to 58%:42% ignoring the Irish scheme<br />
  15. 15. Case Study 2 – Mr & Mrs B<br />Clients did divorce<br />Decided to offset all his pensions<br />Pension share in Mr B’s favour for 100% of Mrs B’s SSAS benefits<br />Mrs B resigned as a trustee of SSAS<br />
  16. 16. Summary<br />Difficult market conditions add to complexity<br />Here to help at all stages<br />Trust built up over time<br />
  17. 17. Any questions<br />?<br />
  18. 18. Further information<br />Phil O’Connor is an Resolution accredited Independent Financial Adviser. He is a Certified Financial Planner and holds the G60 qualification enabling him to handle pension transfer cases.<br />This presentation represents our present understanding of current legislation and Her Majesty’s Revenue & Customs practice. <br />Whitewell Financial Planning Limited is an appointed representative of The Whitechurch Network Limited, which is authorised and regulated, by the Financial Services Limited.<br />

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