When I am preparing single joint expert witness reports in respect of pensions on divorce, I know that I am working for the Court.
I sign a declaration to that effect and know that any fee I am charging is going to be paid by both parties and the content of my report and the fee I receive must not be affected by the recommendations contained in my report.
Sometimes though the decision about how the pension value is to be shared has already been decided and my client approaches me to provide advice about how to invest their pension share.
When this happens I am working for that individual and as well as ensuring the suitability of advice; I know that all of my responsibilities are towards that client, not their ex-spouse and certainly not the pension scheme from where the share is coming.
This can be confusing though and a case I am dealing with at the moment is a good example.
The agreement is that the ex-husband will give up a share of his substantial pension fund at an amount which is sufficient to provide his ex-wife with a known net income amount for the rest of her life.
The obvious solution for this spouse is to use her share to buy an annuity. That way she gets certainty of gross income.
We can calculate the amount of the pension share that she needs to buy the annuity.
Whilst that share in the pension sharing annex has to be expressed as a percentage amount the ex-husband will have no say in the provider of that annuity.
Of course we are going to seek the best annuity rate that can be offered to our client but with annuity rates being so low at the current time it is going to require a bigger share of his pension fund than if we were buying the annuity at a time when rates were better.
This means he is going to see a bigger reduction in his pension value than he is possibly expecting. Whilst this is unfortunate there is nothing we can do about it.
But put bluntly I don’t really care!
All I care about is getting the income that my client needs as quickly as I can.
Photo credit: Flickr/mnadi
