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Pensions and Divorce - What is a CEV?

View profile for Mikaela Rogerson
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My solicitor has said I need to get an up-to-date CEV of my pension. What is this and is it necessary?

In order for a couple to reach an agreement regarding their finances following a decision to separate or divorce they are required to tell each other everything about their financial circumstances and provide documents in support. In many cases, apart from their home, pensions can be the most valuable asset. 
 
CEV stands for ‘Cash Equivalent Value’  and in very broad terms provides a starting point for the valuation of any pension fund either party may be a member of.
 
Pensions generally fall into two categories; defined contribution schemes (DC) or defined benefits (DB).  When calculating the CEV for a DC scheme the investment company will look at how much has been invested or paid into the scheme. However DB schemes are different. To calculate the CEV account must be taken of the benefit the pension is designed to produce at retirement, hence a different type of calculation is completed. Members of the ‘uniformed services’ and other public schemes tend to be in DB schemes.
 
The CEV will fluctuate depending on a variety of factors and depending on what type of scheme you are in. The most up to date CEV is needed when considering any settlement.
 
As both parties must disclose the entirety of their financial circumstances to the other the CEV is necessary, unless both parties agree that neither wishes to obtain valuations.  In these circumstances it is in both parties' best interests to receive legal advice on this decision and to understand that this decision could be to their substantial detriment. Without the CEV you could be making an uninformed decision about a settlement and its true value.
 
You can obtain your CEV by contacting your Pension Company or provider. When contacting them you are likely to have to provide your full name, address, date of birth, pension scheme membership number and possibly your national insurance number. Some schemes will happy for you to telephone, email or write to them with your request whilst others will invite you to complete a specific form.
 
Some schemes will charge a fee for calculating the CEV, for example the Armed Services/ Ministry of Defence charge a fee of £180 to calculate a CEV for divorce purposes, but most will provide one free of charge per year if the pension is not yet being paid to you. Whether or not a charge is made will depend on the individual scheme rules. If your scheme intends to charge a fee, you could always ask your spouse if they will contribute towards the cost especially if they do not have to obtain a CEV of their own.
 
When you contact your pension provider in addition to the CEV we suggest that you also ask for the following:
• A copy of the scheme booklet
• A schedule of all fees charged by the scheme
• A statement which summarises how the CEV has been calculated
• Details of the exact pension benefits upon which the CEV is based 
• Whether funds can be transferred externally from the scheme
 
If you need any further information please do not hesitate to contact our specialist family law solicitors Mikaela Rogerson on (01636) 593514 or Julie Bailey (01522) 781481 for further advice and assistance.
 

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