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Instructing a Pensions Expert: Practical Tips (Part 1)

Peter Crowley, from Windsor Actuarial Consultants, provides some commonsense tips and insights on working with a pensions expert. This is the first in a series of three short pieces on the subject.

image of peter crowley windsor actuarial consultants

Peter Crowley, Windsor Actuarial Consultants

Instructing a pensions expert for the first time can be quite daunting. Few solicitors enter family work because they enjoy pensions - they are quite often an area they would rather avoid! However, with pension benefits becoming a more and more significant part of family assets, and as the Courts are now far more familiar with the intricacies of pensions since the advent of pension sharing, they have become an important consideration.

The rules on the instruction of experts in CPR35 are a useful starting point, but pensions in family work involve additional considerations. For example, the options available are limited; pension sharing and offsetting being the choices in the majority of cases. Also, there is little scope for revisiting a decision once it is made, so clients need to be aware of the options available, and to make informed decisions, at this trying time.

I have divided this article into three parts - this one, the first covers timescales and planning, the second covers the process of instructing an expert or experts, and the third covers the instructions themselves.

Timescales and Planning
Once you are aware that your clients (or their spouses) pensions may be significant, information should be sought at the earliest opportunity. A quick test is the length of time they have been the member of a pension scheme - if the total is ten years or more, the values may well be significant.

Other indicators are:

Next, determine what sort of expert you may need (in conjunction with your opponent – more on this in part II). If all the pensions assets are of a money purchase nature (SIPPs, SSAS plans, stakeholder or personal pensions), then an IFA may be best suited to handling the case. They should be vetted for their divorce and pensions expertise; Resolution can provide details of accredited IFA’s. If significant final salary benefits are involved, a degree of more specialist expertise is appropriate, often involving an actuary.

At an early stage, you should check with your expert what information they need (a benefit or transfer statement may suffice), what is missing, and how long they expect the report will take. Alternatively, would they (and your client) be happy with estimates, and how sound are these likely to be? For example, government backed schemes publish their transfer factors, and these could be used to update out of date CEs. This will help you to schedule your hearings efficiently.

As matters progress, you would be well advised to keep in touch with your expert to ensure that all is going well. If there are likely to be any hold-ups, communication at this stage is vital. One does not want a minor asset holding up the major decisions. In addition, a rough estimate of how the results are shaping up may help parties to prepare for the negotiation process.

Once the report is received, be sure to allow enough time for the parties to digest it, at least a few days plus question time, as even the clearest of reports may take some time to understand for such a complex subject. Often, after a period of staring intently without any apparent benefit, the answer will jump out, and the issue seems to settle itself. But the head-scratching period is essential before this can happen!

Next - Preparing your instructions