My ex and I are in the process of a divorce. He has a State Funded Defined Benefit Pension Plan. He will be able to retire in 8 years at age 50 with full benefits. We have been married for 18 years.

During settlement talks today, my ex's attorney produced a letter from the Pension Plan stating the value of his plan is $13,500. It also stated that at retirement, monthly payment amounts would be approximately $500 per month. My understanding is that when a pension plan is valued, they look at the retirement age and life expectancy among other factors. I have been willing to trade out my interest in his pension plan in exchange for some real estate (approximately $20,000 equity for each of us). Today, they wanted me to accept an offset of $6,800 to the equity of the house. I am fairly certain that his pension plan is going to value at more than this. Am I correct in these assumptions?

A Defined Benefit pension plan is valued at its present value, which may be very low. One cannot count on a person living to collect their pension so generally its not value at future value. I believe, in a divorce, one can only expect a share of present value.

you may of course, make that argument in court. Just because "his" attorney says it has a certain value, why do you suppose to believe him. This is where your attoreny presents their value and an agreement is tried to be reached.

The value that they presented in our meeting was his contributions to date. That is not the "value" of his plan. We have made our offer. I have let him know that if he does not accept it, I will have his plan valued. From the research I have done (with the help of some people who are not actuaries but are qualified enough to value the plan), taking into consideration discount mortality rates and interest rates, the value should be around $92,000.