Will my pension be split in a divorce?

In a divorce, a pension must be valued and included as one of your assets to determine the property issues in your case.

Once the value of the pension is determined, the options to divide the pension are different depending on whether or not the plan holder is retired and whether the pension is under provincial or federal legislation.

For Ontario pensions, either spouse can apply for a valuation by gathering up 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.

When the plan holder is still working, there are a number of possible options. The plan could be equalized or the value can be treated like any other solely owned asset in the calculation of the equalization payment. For example, up to 50% of the value of the pension can be transferred to another pension plan or locked in registered retirement plan by lump sum transfer. If you owe an equalization payment to your former spouse, another option is keeping the pension intact and funding the equalization payment by a cash payment or transferring some other assets.

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.

If you are not satisfied with the valuation prepared by the pension plan administrator, you can retain an independent valuator to calculate the value of the pension.

Federal pensions must be examined on a case-by-case basis to determine whether a private actuary must be retained 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.

If you have any questions about your divorce and pension, please contact one of our lawyers to discuss your situation.

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