Valuing Foreign Pensions for Estate and Family Law Purposes
There is often a need for foreign pension funds to be valued for family law and estate purposes - both in Australia and overseas. Where the pension fund is a simple money purchase or contribution scheme which is immediately accessible, the valuation process is quite simple. However, the valuation of many overseas pensions, particularly where they are defined benefit/final salary schemes or they are many years away from being vested, can be very complex. The additional complexities posed by foreign pension schemes may include the following variables:
- Assumed investment rates of return
- The timing of any withdrawal and whether the withdrawal will take the form of a lump sum, staggered lump sums, life income stream or a combination.
- How any withdrawal of either lump sums or income streams would be treated for tax purposes in both the pension fund's country of residency and Australia
- Foreign exchange rates applicable over the investment and withdrawal period
- Longevity assumptions
In practice, calculations ordinarily provide a range of values which allow the parties involved to then jointly agree a valuation for the purposes of apportioning assets.
Given the diversity of circumstances we encounter, in terms of the location and individual nature of the pension funds, almost all calculations are very bespoke in nature and the process is very time intensive. This is reflected in the professional fees levied by advisors; with the result that valuations are only recommended in situations where there is considerable intrinsic value and complexity in the pension fund.
If you wish to initiate a discussion regarding the valuation of a foreign pension fund, please complete the inquiry form below. In these particular situations, we will only accept inquiries from appropriate professional advisors, such as lawyers, financial planners or accountants, rather than individuals - to ensure that any valuation is necessary, and used in the appropriate context. Valuations in themselves do not represent professional advice; they are simply a tool used by advisors to assist in reaching agreed valuations.
If you would like to arrange professional advice please complete the Inquiry form below providing details and you will be contacted promptly. You will receive a fee quotation in advance of any advice or services being provided.