A pension valuation or appraisal is used to determine the value of a particular pension account at a point in time. During divorce, it is common for a spouse who has a pension account to be required to obtain such a valuation to determine division of property appropriately. An actuary may be required to determine the proper valuation technique based on your divorce case. If you decide that you need to hire an actuary, you can ask that your attorney recommend one to you.
Pension Valuation Explained
Valuation of a pension is complicated because the current value does not necessarily reflect the value at payout. Also, some of the pension may have been earned prior to marriage. Each pension plan is different and valuation upon divorce should be handled according to the type of pension you have. One method for valuation is the accrued method which assesses the current value of a pension at divorce. Another method used in some cases is the projected benefits method which assesses what the plan will be worth at payout time.
There are some factors to consider when coming to a valuation method and determining how much a spouse will be awarded in divorce, including (but not limited to):
- Whether or not the marital relationship contributed to the development of the spouse's career in a significant way.
- What kind of pension plan the spouse has.
- The length of the marriage.
- Whether contributions were made to the plan prior to marriage and after marriage.
- Whether a lump sum or monthly payments are sought.
- Whether the pension is in payout or when the pension will be paid out.
- The stated age of retirement as determined by a particular pension plan.
There may be other special considerations depending on your divorce case. Because valuation is complicated, you will likely need the assistance of a professional who has the skills to calculate pension valuation.
Getting Legal Help
If you need help appraising a pension or other marital assets, getting the advice of an attorney can make it easier. An attorney will be able to assess your case based on state law and recent cases in this area. Division of assets will depend on whether you live in a community property state or not and other state laws that specifically pertain to the classes of assets you have. An attorney will be able to skillfully advise you of your options and the law.
