Case Study 4 - Pension Sharing

Background

  • Mrs C, aged 58, had been granted a 25% pension share in relation to her ex husband’s British Aerospace Pension Scheme benefit which was already in payment.7
  • Mrs C was a member of the Merseyside Pension Fund, part of the Local Government Pension Scheme and wondered whether this should be the destination for her pension credit.
  • She was extremely risk adverse and likely to retire at age 65.

Concerns

  • Mrs C was unsure of how to deal with the pension share on divorce.
  • She was concerned about her options, what benefits she was entitled to and where the pension credit should be placed.
  • If the pension had to be transferred to a individual pension how should this be invested.

What We Did

  • Provided a comprehensive overview of the options on divorce, explained why some options were not available to her and discounted others as inappropriate.
  • Advised her to transfer her 25% pension share to a personal pension arrangement in her own name having discounted the other options.
  • Undertook a psychometric risk profile exercise (see www.FinaMetrica.co.uk) to develop a more rounded understanding of her risk tolerance and built a suitable asset allocated investment strategy.

The Results

  • Mrs C has a pension entitlement in her own right with the flexibility to draw benefits as and when she wants.
  • She has a full understanding of the risks in her pension and what benefits she will be entitled to at retirement.

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