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Pensions & Separation

A pension is an asset that must be valued and included in the calculation of net family property in a separation. Ontario pensions are now governed by legislation that requires the pension administrator to provide the Family Law Value that is to be included in the calculation of net family property. The law now allows the pension holder to choose whether to make an equalization payment or to transfer a portion of his/her pension to the other spouse to satisfy the equalization payment.

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.

What will happen to my pension in a separation?

A pension in a separation 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.

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

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3300 Highway 7 West, Suite 210
Vaughan, Ontario L4K 4M3
Telephone: 416 987 3300

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Bortolussi Family Law is located in Vaughan, Ontario and serves the Greater Toronto Area including Woodbridge, Concord, Maple, Kleinburg, Thornhill,  Vaughan, Markham, Richmond Hill, Brampton, Bolton, Nobleton, Newmarket, Oxford, Orangeville, Aurora, North York, Etobicoke, Caledon, Whitchurch-Stouffville, King City, Schomberg, Mississauga, Oakville, Streetsville and Toronto.