How are pensions divided in a Canadian divorce?

If you’re getting divorced in Canada and you or your spouse has a pension plan, you’ll want to know exactly how it is meant to be divided. After all, this is a source of continuous income, so it’s one of the most valuable assets you have.

In 1987, it was determined that those paying into the Canadian Pension Plan would need to split the credit that had built up evenly in half. This only happens, though, for marriages that last for a year or more.

The 50/50 split is often good for one spouse and bad for the other, depending on wages and the exact amount that was paid in. Unless this is identical and the amount of credit contributed on each side is therefore the same, one spouse is going to lose some of his or her credits, while the spouse that put in less will gain some of them.

Still, this is seen as a fair and legal way to divide the pensions since both people anticipated having the full amount when they got married. Dividing it means that they end up with as much support from the plan as they would have gotten, if they were still married.

For pension plans coming from employers and not the government, the court will just make a ruling. In general, this rarely goes over a total of 50 percent being given to the spouse who was not working for that company, though the court in British Columbia does have the power to make any ruling that is deemed fair.

Dividing assets can be complicated, so be sure you understand all of your rights.

Source: Brighter Life, “Who gets the pension in a divorce?,” Sheryl Smolkin, accessed April 23, 2015

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