Vaughan Divorce Lawyers Assisting With Pension Equalization

A pension is an asset that must be valued and included in the calculation of net family property following a separation for the purposes of equalization. The options to divide the pension will be different depending on whether or not the plan holder is retired and whether the pension falls under provincial or federal legislation.

Valuing Federal Pensions for the Purpose of Equalization

Federal pensions must be examined on a case-by-case basis to determine whether it will be necessary to retain a private actuary to value the pension or whether the pension administrator will use the rules in place for Ontario pensions. In many cases, one spouse can transfer a portion of his or her federal pension to the other spouse to satisfy an equalization payment owing.

Valuing Ontario Pensions for the Purpose of Equalization

Ontario pensions are governed by legislation that requires the pension administrator to provide the Family Law Value that is to be included in the calculation of the pension holder’s net family property. Either spouse can apply for a valuation by gathering the required information and submitting the necessary forms to the plan administrator. The plan administrator will then provide both spouses with a valuation within 60 days. If either spouse is not satisfied with the valuation prepared by the pension plan administrator, an independent valuator may be retained to calculate the value of the pension.

The legislation allows the pension holder to choose whether to make an equalization payment or to transfer a portion of their pension to the other spouse to satisfy the equalization payment.

Pension Equalization if the Pension Plan Holder Is Still Working

When the plan holder is still working, there are a number of possible options for dividing the value. The plan could be equalized, or the value could be treated like any other solely owned asset in the calculation of the equalization payment. For example, depending on the terms of the pension plan, up to 50% of the value of the pension can be transferred to another pension plan or locked in a registered retirement plan by a lump sum transfer. If the plan holder owes an equalization payment to their former spouse, another option would be to keep the pension intact and fund the equalization payment by a cash payment or a transfer of other assets equivalent in value.

Pension Equalization if the Pension Plan-holder Is Retired

When the plan holder is retired, part of the monthly pension payment can be paid directly to the other spouse, based on a calculated percentage entitlement. This is often the simplest way to divide the value of the asset for a spouse who is already in receipt of regular pension payments.

For Guidance on Dividing Pensions in a Divorce, Contact Bortolussi Family Law in Vaughan

At Bortolussi Family Law, our divorce lawyers have been advising clients on complex pension matters for decades. Based on a review of the type of pension involved, we can quickly determine the most effective way to move forward with the valuation process. We have relationships with several outside valuation experts when a third-party opinion becomes necessary.

From our office in Vaughan, we assist clients from across the Greater Toronto Area, extending out to Mississauga, Brampton, Caledon, Whitchurch-Stouffville, Woodbridge, Maple, Kleinburg, Caledon, Concord, Vaughan, Bolton, Nobleton, Markham, and Etobicoke and all areas in between.

We have considerable experience working with high-asset families with complex finances. We take the time to gain a full understanding of our clients’ goals in order to identify the best path forward and match them with the lawyer best suited to secure a favourable result. To discuss your circumstances and learn about the options available to you, please reach out to us online or by phone at 416-987-3300.