A Professionally Accredited Consulting Actuaries Firm

Divorce Pension Valuations – Actuarial Report.

formal professional written opinion

The proper selection of an expert witness can be crucial to the outcome of a case. One aspect of this is the choice of supportable actuarial method and assumptions. The other aspect is the choice of an articulate expert experienced in public speaking, particularly in explaining very technical calculations in a way easily understood by lay people.

With clients in Minneapolis and St. Paul, as well as greater Minnesota and Wisconsin; we have provided actuarial pension calculations, reports and testimony since 2000 specific to the equitable distribution of marital property. Our approach is grounded on traditional actuarial principles, but does not rely on canned software or boilerplate formats. This enhances the credibility and communication of our conclusions.

  • One part of our role is to provide independent, objective advice on the economic value of a retirement plan. We do so through detailed calculations summarized in a professional report. The report outlines our conclusions, our method and assumptions, and the sources and background material on which we rely.
  • The other part of our role is to assist attorneys in better understanding the intricacies of the benefits, themselves, as well as alternate approaches and outcomes to the same set of facts. We do so through telephone and e-mail communication.

Our opinions are prepared in compliance with Actuarial Standard of Practice No. 34 of the Actuarial Standards Board. For background information on this ASOP, refer to the Actuarial Standards Board publication Actuarial Practice Concerning Retirement Plan Benefits in Domestic Relations Actions.

Our Approach

Our actuarial report outlines our conclusions, our method and assumptions, and the sources on which we rely.

We assist attorneys in better understanding the intricacies of the benefits, themselves, as well as alternate approaches.

Management Series Topic

Defined benefit plans can be valued for a variety of reasons, one of which is to establish a reasonable fair market value in a divorce. This paper explores the process in detail and suggests pitfalls to avoid.

Learn More

Items to Consider When Selecting an Actuary

Professional Credentials

At a minimum, look for a Fellow of the Society of Actuaries, and a Member of the American Academy of Actuaries

Years of Experience

Particularly experience in valuing pensions within the divorce context

Communication Proficiency

Both written and verbal, and the ability to know one’s limits

Method and Set of Assumptions Used

Ability to articulate the method and set of assumptions used and why they are reasonable. This is critical in communicating technical matters succinctly to non-actuaries.

Experience in helping to form strategies

If requested

Experience in formulating QDROs

If requested

What Do We Need To Get Started?

The following four sections summarize the data we need in order to provide a valuation report. If some of these are not available, please let us know since it may be possible to get by without them (depending on the case). Or we may already have some items on file.

a. The pensioner’s full name, date of birth, and date on which he/she started in the pension plan. (The start date in the plan often is not the same as the employment date.)

b. Date of marriage

c. Date you desire the calculation to be made “as of”. This item is something both parties should agree on in advance, since all marital assets typically are valued as of that date, for consistency.

A written statement from the plan administrator as to the amount of deferred monthly benefit the participant has accrued at the desired date of valuation. (For example: for service through a given date, you have accrued a monthly income of $100 commencing at age 65, payable on a life only basis.) Some plan administrators have formats already developed for such a request. Others take the form of a short response letter to counsel upon request. In other cases the plan maintains a user-friendly online system that can determine it for you.

If the above is unavailable, then it may work to receive the components to calculate it. For example, the plan’s benefit formula, compensation history, and length of service from entering the plan until the date of divorce valuation calculation. However, this alternative is not as reliable, since the calculations by the plan’s own administrator are likely to be superior

Summary Plan Description (“participant handbook” explaining the plan), and any other literature you may have received. For example, correspondence received from the plan in the past concerning any future cost of living adjustments or other benefit changes.

Copy of anything you have received from opposing counsel concerning the pension. For example, an actuarial valuation opposing counsel has requested separately.

Meeting Your Needs

We provide a signed, emailed copy of the valuation report as soon as it is ready, and send an original signature copy by mail at that time as well. Typically we can provide the report within 48 hours of receiving the complete list of input items. Quicker turnaround is possible, upon request. When in-person testimony is needed, we are available to appear in court.

Contact us to set up a time to discuss your needs, or for more information about our services.

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