By Sheryl Smolkin, BrighterLife.ca
July 15, 2014
Dividing up family property after a divorce means more than deciding who gets to keep the house. It also means dividing up your pensions.
When a marriage breaks down (or in some provinces, when a common-law relationship ends), family property must be split between the separating partners. Beside things like the matrimonial home and joint bank accounts, family property also includes pensions — both government and private. The value of pensions accumulated during the relationship is often a significant portion of the family’s assets.
While the Canada Pension Plan (CPP) and some private pensions (for employees in federally regulated industries such as chartered banks, telecommunications and inter-provincial transport) are federally regulated, the Quebec Pension Plan (QPP) and other private pensions are governed by provincial statutes, so there is a web of often subtle, but important differences among the provinces that you need to be aware of. This is especially important if you or your soon-to-be former spouse worked in more than one province over the course of your relationship.
Therefore, if you and your spouse are planning to separate or divorce, it’s important to get legal advice so any agreement or court order dealing with pension splitting reflects both the laws where your pensions were built up and the specific needs of your family.
Here is some basic information about pension credit-splitting in the CPP/QPP, private pension plans and registered retirement savings plans (RRSPs).