Divorce Tips Database


Online pension valuations and leased valuation software may be useful tools for the family lawyer. Indeed, PAC will soon make online valuations available. The online or leased pension valuation is only as good as the valuation firm behind the software. If the software vendor is unfamiliar with Pennsylvania case or statutory law regarding pensions in divorce, the valuation will not be correct. There are several common pitfalls of online valuation, including incorrect use of coverture representing length of marriage divided by total employment service as detailed in PA statutory law Act 175, incorrect consideration of disability in terms of mortality, and incorrect or lack of the Cornbleth1 Social Security offset when the employment is not covered by Social Security.

ACT 175 (PA Senate Bill 95, clarified by Senate Bill 124)

Valuation software may automatically base the pension valuation on the benefit accrued as of the cut-off date, without regard to state law. Under Berrington2, the marital portion was the benefit accrued as of the date of separation (the cut-off date). Now, however, under Act 175, the benefit accrued as of current date or trial date, multiplied by the coverture fraction, is used in determining the marital portion, and therefore such automatic software may be invalid.

Act 175 is effective for all PA divorce cases, regardless of date of commencement. A pension appraiser using Berrington and offering Act 175 as an alternate version appears not to understand Pennsylvania law regarding equitable distribution of pensions and the resulting valuation may likely yield an invalid result.


Valuation software usually allows the user to assume a cost of living adjustment (cola) factor. However, very few plans include cost of living adjustment. Moreover, the Zollars3 case specifically excludes a present value calculation that includes cola, but the vendor may not be familiar with Pennsylvania case law.

PALLADINO (gender specific mortality)

Many online valuation firms and software vendors use a gender neutral mortality, without regard to state law. In Pennsylvania, the Palladino4 decision mandates use of gender specific mortality, with a separate mortality table for males and females. Use of the gender neutral table will incorrectly raise the value for males and lower the value for females, possibly having an adverse impact on your client.


Pension Analysis Consultants (PAC) was recently involved in correcting a valuation for a case where the pension appraiser used a non-normal mortality because the “disability” box was checked off on their online form. Further investigation showed the employee was on a psychological disability that was presumed not to affect mortality. Where disability is due to a non life-threatening condition such as depression or a bad back, use of non-normal mortality due to “box being checked” may yield an incorrect result and could hurt your client’s interest.


PAC was recently involved in correcting another valuation for a case where the pension appraiser did not perform the Social Security offset in a Civil Service Retirement System (CSRS) valuation. Cornbleth allows for the imputed Social Security benefits to be subtracted from the pension value when employment is not covered by Social Security. Neglect of the offset incorrectly increased the marital value of the pension, which adversely affected the client. When the lawyer inquired as to why the Social Security offset was not performed, he was told by the appraisal firm behind the online valuation that the “box on the form was not checked” by the lawyer. But it is not up to the family lawyer to know when the offset applies; it is up to the valuator. Neglecting to perform the Social Security offset online because the “box was not checked” by the family lawyer indicates the valuator is unaware of the Social Security offset. The fault is not the lawyer’s. A proper online package would avoid this sort of error.

Proper client representation may require a present value calculation of retirement plan assets. Incorrect application of case law, incorrect mortality and omission of Social Security offset may be issues to consider. PAC’s forthcoming online valuation software will offer the same level of sophisticated actuarial service as provided by PAC in written valuations.

President & Actuary

1 Cornbleth 580 A.2d 369 (Pa. Super. 1990)
2 Berrington 633 A.2d 589 (Pa. 1993)
3 Zollars 579 A.2d 1328 (Pa. Super. 1990)
4 Palladino 713 A.2d 676 (Pa. Super. 1998)

PAC provides pension valuations, QDROs and actuarial reports for divorce attorneys and marriage dissolution mediators nationwide. Our Philadelphia offices are located in the suburb of Elkins Park, Pennsylvania, from where we serve the needs of legal professionals nationally, including east coast states such as New York, New Jersey, Virginia, North Carolina, Florida, Washington, D.C., and Maryland. Our Florida office located in Coral Gables, FL serves Florida family attorneys.
Pension Analysis Consultants, Inc.

Contact Us For Specific Information About Your Case:

P.O. BOX 7107
Elkins Park, PA 19027

Phone: (215) 782-9845

(800) 288-3675

Fax: (215) 782-9852

Mark K. Altschuler President

ASPPA Member

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