Valuing pension rights on divorce

• Forensic accountants can offer expertise in valuing pension rights as well as experience of the litigation process.
• Valuations obtained in relation to different pension arrangements are used as a basis for ‘sharing’ pension rights between the parties.

Pension rights in divorce or dissolution settlements can often amount to the largest asset after the equity in the family home. Professional advisers therefore need to pay close attention to this aspect of the ‘family estate’. This article discusses valuation issues in order to provide a basis for a negotiated settlement which reflects the capital value in present-day terms of the pension rights of one or both parties and identifies areas in which solicitors may need help from forensic accountants.

The complications inherent in valuing pension rights are increased by the large numbers of different pension arrangements which exist. There are several sources of pension income including: the basic state pension;