Software Review: Express Pension Valuation Online

Ian Downing, of Act Family Law, assesses a new online pension valuation service for family lawyers

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Reviewed by Ian Downing, Act Family Law

Pensions are the bugbear of ancillary relief issues. Often a substantial proportion of the total asset value, it takes considerable time to get information, and a CETV, from the pension scheme, and then comes the question of whether the CETV gives a fair indication of the true pension value. Then its off to the actuary for a report - all of which takes valuable time. Clients come in to initial meetings with various bits of information, but rarely have any idea of the pension's value without which it is difficult to give even basic advice on quantum.

Now there is an online service,– https://pensionrelief.com. Provided by Bradshaw Dixon Moore (BDM), "an actuarial and administrative professional services firm" the website offers their Express Pension Valuation (EPV) as quickly as you can type in the answers to 18 questions and pay £25 on-line (about 10 minutes in my tests). The resulting 7 page report printout, (requires pdf installed) gives "a quick, neutral valuation of defined-benefit (final salary) pensions."

BDM claim the program will value pension assets more appropriately than a CETV. They describe EPV as "a tool mainly for professional advisors, who may use it as a cost effective alternative to obtaining CETVs." They also say "This makes it particularly suited to both mediation and collaborative law." The report is "an actuarially signed-off report" but doesn't replace the need for a CETV or, if relevant, a formal actuarial report.

The process is well organised and easy to use. You can download a checklist of the information required from a link in the introduction. Once in the program the questions are clear (and annotated with help notes if required ). It is probably necessary to inform your client of the questions in advance, as (given the number of husbands who have difficulty remembering the date of their marriage) they may not immediately have to hand such details as date of start of relevant employment, or the scheme retirement age.

The lawyer also needs to have some idea of what type of scheme is under consideration, as there are necessarily separate programs for the uniformed services and other schemes, and in the latter, the program requires you to state whether the scheme is an "old" or "new" public sector scheme, or "good" (1/60th) or "average" (1/80th) private scheme.

Given the opportunity to try the system on a couple of cases for which I had already obtained actuarial reports, the results were very close to the figures I expected.

The system seems to do what it is meant to do very well, and quickly, and for a fee of £25 it is bound to be more cost-effective than any attempt to make assumptions on your own. The question is, when would you want to use it, and what for?

The on-screen documentation, all very clear and helpful, makes explicit that this is an estimate of the value of the pension assets, and not a CETV (although in many cases the difference will be slight). For those unclear about the difference, the website has several useful mini-guides which are worth a visit in themselves. There is a link to a detailed explanation of the assumptions behind the EPV calculation which should be read and absorbed.

Indeed, the site's various guidance notes, flow charts and explanations provide as good a basic introduction to the issues of valuation of pensions on divorce as I have come across. Less experienced family lawyers and clients alike can learn a lot from browsing the information freely provided. It should carry CPD points!

What the EPV should do is highlight what the "real value" of a pension may be, whether or not you already have, or intend to get, a CETV. If the CETV and EPV differ, and you are sure the data input is correct, it is likely you have a pension which is undervalued by a conventional CETV, in which case it will be worth considering obtaining a proper report, which BDM are of course happy to provide for the appropriate fee.

In situations where, for expediency or simplicity, parties are prepared to deal with pension issues without waiting to obtain CETVs, this could be very useful.

As the EPV is a pay per report system, with no additional subscription requirement, this is something that everyone is likely to find useful at least once in a while, and possibly rather more often. At the price, it is difficult to fault.

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