Contents of the statement of benefits for the purposes of partition
Newsletter number 32,
Amendments to the Regulation respecting supplemental pension plans effective 4 January 2018, as well as
division V – Transfer of benefits between spouses of the
Regulation respecting supplemental pension plans, to find out the rules for partition applicable to spouses in a civil union, the changes to the payment methods applicable to the former spouse, and the calculation of member benefits after partition.
The plan administrator has
60 days to issue a statement of benefits. Each spouse must receive a copy.
For married spouses, the contents of the statement of benefits are the same, whether or not they are in mediation; only the valuation date is different. The contents will be similar for de facto (common law) spouses, except for the value of the portion of benefits accumulated during the conjugal relationship, since the administrator does not have to indicate it.
First part of the statement
The first part shows the result of various calculations. The information used to make the calculations is shown, thus validating the values indicated in the statement, unless the information used is not accurate or the calculation methods do not conform to the
Regulation respecting supplemental pension plans .
The nature and total value of the benefits
The total value of the benefits is used to ensure that the 50% limit provided for by the Civil Code (for married spouses) and by the Supplemental Pension Plans Act (for de facto spouses) is respected.
If the member's benefits include both
capital benefits and pension benefits, the nature and value of the benefits must be indicated separately.
Value of the benefits accumulated during the marriage
The value accumulated during the marriage is usually the portion used in the mass for partition. For example, for spouses subject to the rules of family patrimony, the value of the benefits accumulated during the marriage is considered part of the family patrimony.
For de facto spouses, the statement of benefits does not have to indicate the value of benefits accumulated during the conjugal relationship.
If the member's benefits include both
capital benefits and pension benefits, the value of the benefits accumulated during the marriage must be indicated separately for each of the types of benefits.
Information about membership
Information about membership is not required for de facto spouses, nor is it required for certain methods of
calculating the value of capital benefits accumulated during the marriage, if such method do not involve that information.
The statement of benefits must indicate the total period of membership (in months or days, depending on the provisions of the plan) as well as the period of membership during the marriage.
If the member's benefits include amounts transferred from another plan and the period of membership for those benefits is known, the statement of benefits must also indicate, for those benefits, the total period of membership as well as the period of membership during the marriage.
Value of residual benefits
Where the member's benefits have been previously partitioned, the administrator must indicate the value of the member's residual benefits after partition in the statement of benefits, if he knows it.
This part of the statement must be signed by the person who issued it.
Second part of the statement
The statement must contain:
Information used in the calculations
The statement must indicate the following information:
- the date the member joined the plan
- for married spouses:
- the date of marriage
- the date of institution of the action or the end of the conjugal relationship, whichever was used for the calculation of the value of the benefits
- for de facto spouses: the dates of the beginning and end of the conjugal relationship
- the personal information used for the calculations, noting any errors
The personal information used for the calculations concern only pension benefits. This information includes the member's age and, depending on the form of the pension, the spouse's age, credited service and pensionable salary.
Since the personal information is essential to determining the value of the benefits, the statement must indicate that if the member or spouse note an error in the information, they must inform the contact person; any error in the personal information could create inaccuracies in the values in the statement.
Although not required by the
Regulation respecting supplemental pension plans , this precaution may be applied to other information, such as the date of institution of the action or the date the member joined the plan, since an error in these dates can also affect the calculated values.
General information about the rules for partition
The statement of benefits must also contain general information about the principal rules for partition, to ensure that these rules will be taken into account in the agreement or judgment. The text should not be specific to the member, but rather more general in nature.
Modalities and time limits related to payment
The statement must indicate that the application for partition can be made as soon as the time limits for appeal have expired, and that partition is carried out by the transfer of the appropriate amount, generally to a locked-in transfer instrument. The statement must also specify conditions in which the
amounts will be or will not be locked-in.
In the case of a defined benefit plan, the statement should indicate that if the plan is insolvent when the application for partition is filed, the spouse's benefits should be paid in proportion to the degree of solvency, with the balance of benefits being paid within 5 years.
Rules relating to interest
The statement must mention that interest will be added to the amount indicated in the agreement or judgment. It must also specify the period during which the interest will be credited and how the interest rates will be determined.
Rules relating to reinstatement of the pension
If the member is receiving a joint and survivor's pension and the breakdown occurs after retirement, the member can obtain the pension amount that he or she would have received if he or she had not had a spouse at retirement. In this case, the full pension is reinstated.
If partition is not carried out on the member's benefits following a breakdown, the member may have his or her full pension reinstated by contacting the plan administrator.
If partition has been carried out, the administrator will reinstate the member's full pension at the same time the pension is calculated to take into account the amount transferred to the former spouse.
Of course, the pension will not be reinstated if the member asks the administrator to maintain the joint and survivor's pension in spite of the breakdown of the conjugal union.
This rule must be mentioned in the statement of benefits. However, it need not be mentioned in the case of a plan in which this rule can never be applied, for example, where a plan provides that the spousal status is established at death and not at retirement.
Note that the administrator does not have relevant information about the amounts transferred and the consequences of this fact
Where a married member's benefits include benefits transferred from another pension plan and the administrator does not have the information necessary to make an accurate calculation of the value of the benefits accumulated during the marriage (for example, the administrator does not have information about the membership period of the transferred benefits), this fact must be mentioned in the statement of benefits. The administrator must also note that an approximation was made and that if the necessary information were provided, a more accurate calculation method could be applied.
Additional information that must appear in the statement
The statement must also include the following information:
- the name of the plan and its registration number
- the name and address of the plan's contact person
- This is the person that the member or spouse must contact for additional information regarding the statement of benefits or to point out an error in the information contained in the statement.
- The contact person does not have to be a member of the pension committee. Ideally, the contact person should be the person best able to respond to the spouses' requests.
Some administrators add a note concerning the 50% limit. This is good practice, insofar as the information provided is accurate.
The note should not indicate, for example, that the member cannot give more than 50% of the total value as indicated in the statement. For more information about the rule, see the section on the 50% limit.
For more information