present value on non-government Defined Benefit Fund

[Guest Sandylou]

Thank you all for your replies to my previous post. I am trying desparately to get a "legitimate" value on my ex-husband's Defined Benefit Retirement Plan which he has with the company where he has worked for 32 years. Yes, Paul, there are those actuaries who will give a value based on whatever one particular spouse wants. Unfortunately though, those are the difficult ones to substantiate in court for a divorce settlement. In other words, it is costly to hire so-called "expert witnesses" to back up contrived figures.

I want a legitimate valuation. I have had a difficult time obtaining access to Plan information from the company, however, finally armed with the proper Federal ERISA codes, I have now managed to open the door to obtaining the current figures I need.

I am vague on some definitions. As I mentioned, the Company is now more than willing to furnish me with my requested information. Can I get the Company to give me an acturial valuation for the Defined Benefit Plan? They have, so far, given me the current value of what his monthly retirement benefit would be if he retired today. (he is due to retire in a few months). I am not sure of the proper terminology, however I need the total present value of the plan in order to determine a fair split for property settlement. I know the plan is worth well over $100,000.00.

The company said they would "give me a pension workup so I would know what his pension is worth. They gave me the monthly amount of the benefit payment. Again, I need the total cash value including medical benefits. I am in a community property state, Texas.

Could someone please give me the correct wording as to what to ask for? And, if I need an outside actuary to do the valuation, what figures do I need to obtain to present to a qualified actuary if I ever find one?

[Larry M]

A. If you will tell me what part of Texas you are in, I can refer you to at least one actuary you can trust and whose opinions will stand up in court.

B. The tone of some of the comments on the message board may have implied the actuarial expert can pick numbers out of the air and hope it will stand up. That is not so. At least not from a qualified actuary.

My original response to you was that, in my experience, the methods used must vary in accordance with the laws, rules and regulations of the court in which the case is situated.

For example, some states require the actuary to use a formula which is patently incorrect - but is what the law dictates.

C. I do not know if the State of Texas recognizes retiree medical benfits as a value to be added to the community interest. It is my belief that it IS an important value, and that belief has won its way through the State of California's Court of Appeals. However, I do not know whether Texas courts will recognize that item. But, you should definitely try to get it counted.

Note, though, even in California, where the value is recognized, some lower courts do not know how to handle the benefit. I was involved in one case where the judge said that, rather than awarding a cash amount equivalent to half the value of the retiree medical benefit, when the employed spouse received a direct benefit, the ex was to receive half the benefit. A ridiculous situation - consider if he had a quadruple heart bypass operation would she be forced to have a bilateral one?

D. As to the information the actuary will want, it will include a copy of the plans (a summary plan description should do), vital statistics - dates of birth, marriage, employment, date of separation, salary history (usually for the last three or five years), copies of the last benefit statement given to the participant, and, sometimes, a description of the health of the participant...and any other bits of data you might get from the plan/company.