Amounts to transfer

Important Notice

Please consult 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 This link will open in a new window. 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.

General rules

Normally, the amount provided for in the judgment or agreement must be transferred. The amount can be either a proportion or a fixed amount, to which interest is added.

Former married spouses

If the judgment or agreement confirmed by judgment does not specify the amount to be remitted, half of the value accumulated during the marriage is granted, plus interest.

Former de facto (common law) spouses

The agreement cannot provide for the transfer of more than 50% of the total value of the benefits as at the end of the conjugal relationship, before interest.

Interest

Interest must be added even if not provided for in the judgment or agreement.

Former married spouses

Interest always accrues starting from the institution of the action, unless the judgment provides for the value of the former spouses' property to be determined when the couple stopped living together, in which case interest accrues as of that date. In all cases, interest accrues until the date of the transfer to the former spouse.

Former de facto spouses

Interest accrues starting from the date of the end of the conjugal relationship until the date of the transfer to the former spouse.

Pension benefits

The interest rate applied to pension benefits is the rate used to calculate the value of the member's benefits. For former married spouses, this is the rate in effect on the date of the institution of the action, unless the judgment provides that the value of the former spouses' property be determined as at the date of the end of their conjugal relationship, in which case it will be the rate in effect on that date. For former de facto spouses, the interest rate will be the one in effect on the date of the end of the conjugal relationship.

Where a pension is indexed, the rate applicable to the calculation of a nonindexed pension must be used.

Capital benefits

The interest rate applied to capital benefits is the same as the rate credited to the member contributions during the same period. Generally, this will be the rate of return on the pension fund or on the investments chosen by the member.

When the return is negative, a negative interest is also applied to the amount transferred to the former spouse.

Special cases concerning judgments

The plan administrator may have to intervene in the following situations, with or without the cooperation of the former spouses.

A judgment that is subject to interpretation

Ideally, the former spouses should take steps to obtain a new, more precise judgment. If they do not, the administrator should obtain a written document signed by both they do former spouses expressing their shared interpretation of the judgment.

If the former spouses do not agree on the interpretation, the administrator should not take a position but rather wait for the former spouses to settle the problem.

A judgment considered not in conformity with applicable legislation

In most cases, a judgment is considered not in conformity with applicable legislation because the 50% limit is not respected. In addition, some judgments improperly order the administrator to transfer a pension amount to the former spouse.

The administrator should first notify the former spouses, so that they can obtain a new judgment or make other arrangements.

The administrator can also petition for a revocation of judgment (also called "opposition by third party"). The pertinence of such recourse depends on several factors, including the amount at issue and the effect of the judgment on the pension fund. The administrator is obliged to act in the best interests of all of the members and beneficiaries.

If the former spouses refuse to act (the administrator should always keep written evidence in the file) and the administrator does not petition to have the judgment amended, he must execute the entire judgment, even if it is considered not in conformity with applicable legislation. In no case can he, on his own initiative, refuse to execute the judgment.

A judgment dating back several years (prescription)

In theory, the administrator must carry out an application for partition based on a judgment rendered.

However, if after having been notified of his or her former spouse's application for partition, the member objects to the application before a court of law, for example, on the grounds of prescription, the administrator may not act on the application for partition. He must wait for the judgment and then take appropriate action.

For more information

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