Valuation of savings in the form of capital
Savings in the form of capital, or capital benefits, accumulate in:
- defined-contribution pension plans
- simplified pension plans (SIPPs)
- voluntary retirement savings plans (VRSPs)
- the defined-contribution component of a defined-benefit pension plan or a target-benefit pension plan.
They are called "capital benefits" because all contributions and the yield they provide are credited to the member's account and are not converted into a pension. The benefits are therefore in the form of capital, and not in the form of a pension.
Main points to be aware of
Contents of the annual statement
The statement that members receive at least once a year from their pension plan indicates the total value of the amounts credited to their account. This includes their own contributions, as well as those of their employer and the investment earnings on those contributions. The total value of the benefits as of the date on which the statement is issued corresponds to the sum of the amounts credited to their account.
However, the statement does not indicate the value of the benefits as of the date on which the breakdown of the union occurred. This value can vary on a daily basis, since new contributions are added, and the value of the investments fluctuates.
If the member enrolled in the plan before his or her marriage or civil union
The annual statement does not indicate the value of the benefits accrued during the union. This value is important, since it is the value that is part of the family patrimony.
Calculating this value is more complex than merely subtracting the account balance as of the start date of the union from the balance as of the end date of the union. It is also necessary to subtract the yield obtained during the union from the amounts accrued as of the start date of the union.
Thus, the statement of benefits for the purposes of partition indicates the total value of benefits as of the valuation date, which is usually the date the spouses stopped living together or instituted an action, as well as the value of the benefits accrued during the marriage or civil union.