Divorce Tips Database

PAC's Suite of Financial Services

By: Mark K. Altschuler

Over the past fifteen years, the actuaries at Pension Analysis Consultants (PAC) have personally performed well over 15,000 hand-signed pension valuations and draft QDROs for counsel. PAC has advised in negotiating and drafting property settlement agreements with respect to pensions and other retirement plans. PAC has performed pension benefit projections and settlement scenarios. PAC has provided comparison of alternatives of immediate offset verses deferred distribution schemes.

We at PAC understand that your needs may go to beyond the basics. We also offer you the same high level of expertise in consulting for asset and support decision- making in these significant and growing areas:


PAC values stock options using the modified Black Scholes algorithm. Essentially, the algorithm calculates the probability that the stock will exceed the strike price before the expiration date of the option. Under the Fisher case, this method has been found by the Pennsylvania Supreme Court to be too speculative to be used in a disputed case. The Supreme Court recommended a deferred distribution.

PAC can draft Domestic Relations Orders (DROs) regarding stock options. However, stock options are normally non-transferable, so the order must be served directly on the participant, maintaining a linkage between the parties many years after the divorce. Thus, if both parties agree, the Black-Scholes method can be used for immediate offset. The fee for the PAC stock option valuation is surprisingly inexpensive. Since the order will almost always be served on the participant, rather than the plan, the valuation under Black-Scholes may be used to secure payment.


PAC values Executive Retirement Plans (ERPS) and Supplemental Executive Retirement Plans (SERPS) where applicable, and also drafts Domestic Relations Orders for these non-ERISA Plans. Executive Plans are non-qualified under the Employee Retirement Income Security Act (ERISA), and exceed benefit limits set by ERISA. Typically, these plans are not funded like a qualified plan, and benefits are paid from general corporate assets. There is no fund set aside for the plan that has to meet actuarial standards. In addition, unlike a qualified plan, an Executive Plan is not guaranteed by the Pension Benefit Guaranty Corporation (PBGC). Therefore, counsel for the employee spouse may argue in favor of a deferred distribution based upon payment actually occurring. Since the DRO may have to be served on the employee, not the plan (because it is non-qualified), counsel for the non-employee spouse may object to such a DRO. To deal with this situation, the actuaries at PAC have developed a methodology that combines the two methods of distribution (deferred and immediate), in order to secure payment under the DRO. We also offer discovery services regarding Executive Plans.


What is the basis for a 50-50 split verses a 60-40 split? Generally, it is just a feeling on what is equitable based on earning powers of the parties. However, there are circumstances when a 55-45 split has dramatically different results than a 50-50 split, regarding the income of the. dependent spouse. Asset allocation analysis can put this decision on a rational, quantitative foundation. Based upon certain investment strategies, a financial planner can project the future income of the dependent spouse in various asset allocation scenarios.


PAC offers life insurance schedules that will secure the child support (or alimony) stream of payments, in the event of death of the supporting spouse. We also offer this service in deferred distribution cases when there is no survivor annuity for the alternate payee.


The Federal government has recently discontinued the 30 year treasury bond. PAC's practice has been to use the published interest rate for this bond, in order to comply with the Retirement Protection Act. It appears that the IRS will still publish this rate for the forseeable future, based upon yield curve data from other bonds. However, if there is a change in government policy, our future pension valuations may reflet different interest rates.


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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