Method 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 procedure to follow for partition depends on
whether it is a joint application. A joint application is one that has been signed by both spouses.
An application signed by only one spouse, even if it is accompanied with an agreement by both spouses that was confirmed in a judgment, is
NOT a joint application. In all cases, it is only when the plan administrator has a complete application (including all
required documents, with the exception of the option for a transfer vehicle) that the administrator can send a notice or carry out a transfer.
Unilateral (not joint) application
The administrator must send the applicant's former spouse a notice informing him or her of the application received and the amount claimed.
The notice must be sent as quickly as possible under the circumstances.
A judgment provides that the former spouse will receive half the value of the benefits accumulated during the marriage. The plan is a defined benefit plan and its value has not previously been calculated since no application for a statement of benefits has ever been made.
Since the notice must indicate the value of the benefits accumulated during the marriage, the administrator must first calculate that value. Obviously, in such a case, the notice cannot be sent as quickly as it could have been if a statement had previously been issued.
The former spouse who receives a notice has 60 days after the notice is sent to contest the application for partition in court. To petition the court, the former spouse must be able to present valid grounds.
If an application is contested in court, the administrator cannot carry out partition while the matter is pending and must wait until a decision is rendered. Otherwise, the administrator can carry out partition upon expiry of the 60 day deadline.
- A simple written objection or formal demand by a former spouse addressed to the plan administrator is not sufficient to prevent partition from being carried out.
In the case of a joint application, the administrator can immediately carry out partition and make the transfer.
The administrator has 60 days to carry out a
transfer in accordance with the rules regarding the locking-in of benefits. That period begins, in the case of a unilateral application, 60 days after of the notice is sent. In the case of a joint application, the delay begins to run upon receipt of the application.
However, if the spouse does not promptly inform the administrator which transfer vehicle he or she has chosen and does not sent the required tax forms, it may not be possible for the administrator to meet the deadline.
For more information