Partition of benefits in a supplemental pension plan
Do you have to advise spouses when a conjugal union breaks down? Here are the main rules on partition of benefits that are provided for in the
Supplemental Pension Plans Act
The similar procedure under the Québec Pension Plan is called partition of employment earnings between former spouses.
Reminder regarding partition
Married and de facto (common law) spouses who separate can have partition carried out on benefits accumulated in their pension plans.
Pension plans are part of the family patrimony
Plans are a major asset and an important element in retirement planning. Former spouses should take them into account when having partition carried out on property accumulated during the union.
Partition consists of transferring a share of the value of benefits that the plan member accumulated in the pension plan and not part of the pension that he or she has accumulated, even if the member is retired.
To make decisions about partition of a plan, it is essential to know how much the accumulated benefits were worth at the time of the conjugal breakdown. Observing certain conditions, the plan administrator can provide spouses with a statement of benefits that indicates the value.
Step 1: Valuating benefits
Step 2: The partition process
Some pension plans are not subject to partition
This information on partition is only pertinent to plans in which a member's benefits are subject to the Supplemental Pension Plans Act, that is:
- defined contribution plans and simplified pension plans (SIPPs)
- defined benefit plans
There's a word for it!
Several expressions are used in talking about supplemental pension plans:
- pension plans
- registered pension plans (Revenue Canada )
- pension funds
- company plans
- private plans
A worker's benefits in a pension plan are subject to the Supplemental Pension Plans Act if that worker has a job in Québec under provincial jurisdiction in the private or municipal sector. Some worker's benefits in the parapublic sector are also subject to the same act.
The place where a plan member works, specifically where he or she worked when accumulating plan benefits, determines whether or not Québec law applies. This is the case if a person works in Québec even if the pension plan is administered outside the province or registered with a monitoring agency outside Québec.
Pension plans not subject to the Supplemental Pension Plans Act
- The Québec Pension Plan
- The Canada Pension Plan
- Public-sector pension plans administered by Retraite Québec. Rules of
partition for those plans are outlined in a booklet entitled
Partition of family patrimony.
- These plans are for employees in
the Québec public service, in the health and educational sector, employees
of the Sûreté du Québec, peace officers, elected municipal officials, judges
in the Court of Québec, etc.
- Plans in the private and public sector that are under federal jurisdiction (banks, interprovincial transport and telecommunications businesses, federal public service, etc.)
- Group and individual RRSPs
If you are a pension plan administrator, we invite you to consult the section entitled Partition of benefits, which is designed especially for you. Professionals who would like greater detail on the rules of partition can also consult it.
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