Is the current approach on valuing pensions fit for mediation?

10th October 2018

There are not many occasions in a mediation where I hesitate to say that mediations are conducted in the “shadow of the court”.  I normally emphasise that mediation is not a different process but just a different method of resolving matters.  However, I must admit to some discomfort over pensions. The way in which family lawyers approach pensions is an area where people in mediation most commonly wish to depart.  They do not think that the approach is fair.

When pension experts are asked to advise it is on the current Cash Equivalent Value of the pensions and the projected income figures at various ages.  A decision is then made as to whether the pension should be divided by value or income outcome.  However, the difficulty arises when one of the couple is significantly older than the other person, some of their pension has been accrued prior to the marriage or is in payment.  Often all three of these factors are present.

What they say to me is:  Why is my partner’s future pension accrual not taken into account?

The information I give is that the courts look at the current finances and do not look at any future assets (even inheritance if it is not already obtained) in order to achieve certainty.

However, in a time where both people can have high earning professional, managerial or business jobs and where, due to the pursuit of that career, have married later in life to a younger person, is this fair?  People do have freedom in mediation to craft a proposal which is right for their family but currently there needs to be a great deal of goodwill to deviate from what their lawyers are most likely to advise them.

For more information on family mediation, please contact Christine Plews or another member of the Family team.

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