New rules for pension division upon the breakdown of spousal relationships came into force in Ontario as a result of amendments to the Ontario Family Law Act and Pension Benefits Act. Pursuant to the Family Law Act, the imputed value of married spouses’ pension assets constitutes property. Married spouses who decide to end their marriage are legally entitled to an equalization of pension assets and other property that they have amassed together during the marriage. If you are contemplating separation or divorce in Ontario, it is critical to receive legal advice about the division of pension assets in order to ensure you understand and protect your rights.
The new rules in Ontario for pension division apply to all spouses whose relationship has broken down, unless a court order, family arbitration award or domestic contract provides otherwise. Under this new regime, pension plan members and their spouses may apply to the plan’s administrator for a statement of the imputed value of each spouse’s pension benefits, deferred pension or pension. The pension administrator will first calculate the total value of the pension up to the family law valuation date. The administrator will then calculate what portion of the preliminary value of a pension is attributable to the period of the marriage, i.e. the imputed value of a spouse’s interest in a pension plan.
Once the value of pension is calculated, the value will be included in the pension holder’s net family property, along with his/her other assets, for the purpose of calculating the equalization payment. After the equalization payment is calculated, up to 50% of the value of the pension may be transferred from one spouse to another in order to satisfy the equalization payment in whole or in part.
Contact Gelman & Associates to learn how experienced, forward-thinking, family law lawyers can ensure your pension entitlements are protected during separation or divorce. Call us at (416) 736-0200 or 1-844-742-0200 or contact us online for a confidential initial consultation.