Partition of property
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.
Partition consists in paying the "debt"
A spouse pays his or her debt in cash or by transferring property that belongs to him or her. The spouse can transfer property in its entirety, even if part of the property did not accumulate during the marriage. He or she can hand over any property, even property that is not part of the mass for partition, for example, a property that is not part of the family patrimony.
The method of paying the debt must agreed upon by the spouses, or determined by the judge, taking into consideration the preferences and needs of each spouse.
Even if certain property that is part of the mass for partition are not touched, this does not necessarily mean that a spouse renounces his or her rights. It may mean that the debt was paid with another property.
In a pension plan
Partition of a pension plan consists, for the member, in paying his or her debt by transferring to his or her spouse a part of the benefits accumulated in the plan. Thus, it is the member's debt, not a pension fund debt.
Applicable rules of partition
Civil Code provides that, for the purposes of family patrimony, no one may contravene the rules of partition provided for in specific laws, such as the
Supplemental Pension Plans Act .
When the member no longer has benefits in the plan
If the plan administrator receives an application for partition even though the member no longer has benefits in the plan (for example, the benefits were transferred or the member is deceased), he does not have to act on the application.
However, the former member's debt is not cancelled. The former member or his or her estate must pay the debt with other property, for example, with the amounts that the member has in his or her locked-in retirement account (LIRA).
Limit of 50% of the benefits
Civil Code provides that the debt related to partition of the family patrimony cannot be paid by transferring more than half of the benefits in pension plans subject to or established by an act such as the
Supplemental Pension Plans Act.
This rule applies only:
- to partition of the family patrimony (and not, for example for the partition of acquests)
- to plans subject to or established by a legislative act (and not, for example, to an
LIRA or an
The 50% limit (50% of the total benefits, not 50% of benefits accumulated during the marriage) is calculated according to the value at the time of valuation, before interest.
- It applies to all of the plans subject to or established by a legislative act. For example, if a spouse has benefits in 2 pension plans, the first with a value of 30 000 $ and the second with a value of 25 000 $, he or she can transfer the total value of the benefits in the second plan.
For de facto (common law) spouses, the
Supplemental Pension Plans Act provides for a similar limit. However, it applies to each plan subject to that Act.
Given the information above, the plan administrator cannot always know with certainty that a judgment granting more than half of the total value of the benefits in a plan exceeds the aggregate for all that member's plans.
For more information