Pension Division on Marriage Breakdown
In the event of separation or divorce a claim may be made against your pension. The Plan Office will perform the division calculation provided there is a separation agreement or Court Order which divides the pension in accordance with Part 6 of the Family Law Act, and provided the necessary Family Law Act forms are filed.
Family Law Act Forms
Form P1 – Claim and Request for Information and Notice
The former spouse submits the Form P1 to notify the Plan that they intend to apply for a claim against the member’s pension, or that they simply want information in order to determine if a claim is warranted. It should only be used in cases where no Court Order or Separation Agreement exists, and is normally only used so the former spouse can receive information directly from the Plan, and to provide some measure of protection for the former spouse in the event the member attempts to “dispose of” or make some election with regard to their pension.
Form P2 – Request for Designation as a Limited Member
The former spouse submits the Form P2 to be designated as a Limited Member, making claim against the member’s pension. The Form P2 may only be submitted when a Separation Agreement or Court Order exists that actually divides the pension, and a complete copy of the document must be submitted with the Form P2.
If the plan member is over age 55 and has not retired the division is considered un-matured, and the Limited Member has two options. They can elect to receive a separate pension from the Plan at anytime, but no later than the date the member elects to retire. Or, they can elect to transfer their share to a locked in RRSP.
If the Plan member has already retired and is in receipt of pension payments the division is considered matured. The limited member is only entitled to a proportionate share of the actual pension in payment, and they will not qualify to make any election of their own with regard to beneficiary coverage, or a transfer.
The Limited Member may only make an election with regard to their share of the pension if the plan member has reached age 55. The exception is if the Plan member terminates their employment prior to age 55 AND elects to transfer their own share of the pension out of the Plan. At this time the Limited Member has no choice but to transfer their share out at the same time.
Form P4 – Request by Limited Member for Transfer or Pension
The Limited Member submits the Form P4 to make an election with regards to their share of the pension. The Limited Member may elect to transfer their share of the pension once the plan member has reached age 55, or they may elect a separate pension option.
If the Limited Member elects to receive their share as a lump sum the Form P4 should not be submitted until the member reaches age 55 as the date of receipt of the Form P4 becomes the date at which the Limited Member’s share is valued.
If the member elects the separate pension they will be offered their own retirement options and beneficiary coverage.
Form 5 – Request in relation to a Matured Pension Divided under an Agreement or Court Order made before July 1, 1995.
A former spouse who is already receiving payments directly from the Pensioner for their share of the pension can file a Form 5. It allows for the Plan to make separate payments to each party, with separate source deductions. The form must be filed along with a complete copy of the Separation Agreement or Court Order.
Form P6 – Administrator/Annuity Issuer Response
The Plan is obligated to notify the Plan member when the former spouse has filed a Form P1 or P2 by sending the member a completed Form P6.
Pension Division Formula
The pension division formula specified under Part 6 of the Family Law Act is, A / B X 50% , where A = the number of years of membership service accrued by the Plan member from the date of marriage to the date of entitlement, and B = the total number of years of membership service accrued by the Plan member for the entire period of the pension, up to the date of the event being calculated.
The spouse and member are responsible for paying to the plan the applicable administration fee. A spouse or member who pays more than a half share of the administration fee may recover from the other the additional amount paid. The Plan charges an administration fee of $750.00, or $250.00 if the member is already in receipt of the pension.