If you separate
Simplified pension plan
Whether you are married or de facto (common law) spouses, the sums accumulated in your simplified pension plan can be partitioned between you and your former spouse. The following information explains the process.
What is partitioned...
You can partition money accumulated under your pension plan but not the actual pension that will be paid to you upon retirement. Your former spouse will receive entitlement to a sum of money that he or she can use only during retirement. The amount will be deducted from your accounts.
The steps in partition
Application for a statement of benefits
The sums accumulated in a pension plan during the marriage are part of the family patrimony.
Whether you are married or de facto spouses, there is a limit to the amount that can be taken from your plan and given to your former spouse.
To make an informed decision, request a statement of benefits from the financial institution that administers your plan (your spouse can also make the request). The financial institution has 60 days following the date of your request to send both you and your spouse the statement.
You are married
If you are in family mediation or if you have initiated divorce proceedings, legal separation or civil annulment of marriage, you or your spouse can request a statement of benefits. The statement will indicate the total amount entered in your accounts at the time of the breakdown, as well as the portion of the amount accumulated during your marriage.
You are de facto spouses
You and your former spouse can request a statement of benefits once you are no longer living together. The statement will indicate the total amount entered in your accounts at the time of the breakdown of the relationship.
To be recognized as de facto spouses...
You must have lived together for at least 3 years, or 1 year if a child was born or will be born of your union or if you adopted a child. In addition, the pension plan member must not be married or in a civil union with another person.
Forms to complete
To make the task easier, we provide forms that you can use to request a statement of benefits.
Application for partition
The partition of pension plan benefits is not carried out automatically as in the case of the Québec Pension Plan. You or your former spouse must file an application for partition with the financial institution that administers your plan.
The application for partition should be filed as soon as possible after the breakdown of the relationship. Your former spouse will be paid the amount indicated in your judgment or agreement. In addition, even if not specified in the judgment or agreement, interest will be added for the period between the date of the breakdown and the date of partition.
The 50% rule
If you were married and your family patrimony is partitioned, the judgment or agreement cannot award your former spouse more than half of the total value of the benefits accumulated in your supplemental pension plans as at the date of the breakdown of your relationship.
If you were de facto spouses, your former spouse cannot receive more than half of the total value of the benefits accumulated in your pension plan as at the date on which your conjugal relationship ended.
When to file an application for partition?
If you were married
You must have obtained a judgment of divorce, legal separation or civil annulment of marriage. If this is not the case, partition of the benefits accumulated in your pension plan cannot be carried out, even if you have an agreement with your former spouse.
If you were de facto spouses
Your former spouse cannot demand partition of the benefits accumulated in your pension plan. Partition is possible only if you conclude a written agreement to that effect in the 12 months following the breakdown of your relationship.
Forms to complete
To make the task easier, we provide forms that you can use to request partition.
- If you are married:
- If you are de facto spouses:
Your former spouse will not receive cash from your locked-in account
The amount allocated to your former spouse following partition will be proportional to the sums accumulated in your locked-in and not locked-in accounts.
Your former spouse will have to transfer the amount from your locked-in account to a locked-in retirement account (LIRA) or to a life income fund (LIF) of his or her choice.
The amount from your non locked-in account can be paid in cash to your former spouse or can be transferred directly to an RRSP or an RRIF (registered retirement income fund) of his or her choice. The transfer option will deferral any tax liability until he or she retires.
If you separate, we suggest that you consult the section on our Web site dealing with conjugal breakdown. This will lead you to some of our programs and services that could be very useful to you.
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