How is a present value appraisal used in the divorce process?
An estimate of the present value of a pension is essential when divorcing parties are attempting to divide the benefits using the Immediate Offset Approach. The present value of the pension can be compared to the other marital assets subject to distribution in an attempt to make a “trade-off.” In such a case, the pension holder would keep his/her pension and the spouse would take another marital asset of equal value to balance off the distribution. In order to be in a position to make a “trade,” the value of the assets must be known. The present value report presents the current value of the pension for this purpose.
