Pensions and Family Law
Article by Ken Fraser
For many people, their biggest asset is their pension. They have worked hard throughout their career to earn and save their pension. More importantly, they are relying on it for security and peace of mind in their retirement.
Given the importance and value of a pension, a person with a pension that is going through a separation should immediately seek legal advice to determine their rights and obligations regarding their pension.
Do I have to Share my Employment Pension with My Spouse?
From a Family Law perspective, an employment pension is unique because it has the potential to be both an asset for property purposes and income for support purposes.
From a property perspective, an employment pension is to be shared as part of the equalization of net family property process for married spouses and potentially shared as part of a constructive trust claim for unmarried spouses. Most pension plan administrators in Ontario are able to assist the plan member with obtaining a valuation of their pension to be used in addressing the pension from a property perspective.
From an income perspective, pension income may need to be included in income for child and/or spousal support.
An experienced family law lawyer may be able to assist in protecting an employment pension, whether it is being treated as property or income.
What About My Canada Pension Plan Pension?
There are special rules that make a CPP Pension different than an employment pension.
Pursuant to the Family Law Act, a person’s CPP Pension is excluded as an asset from the equalization of net family property process.
However, federal legislation prohibits parties from agreeing to anything other than an equal division of CPP credits earned during a period of cohabitation upon application by either spouse after separation or divorce. Therefore, while it is not subject to the equalization process in Ontario, it is potentially subject to division and therefore cannot be protected. This can impact future retirement, disability or survivor benefits.
Like an employment pension, income from a Canada Pension Plan will ordinarily be considered income for support purposes.
What About a Disability Pension?
Unlike an employment pension, a disability pension is generally not considered property to be included in a spouse’s net family property for the purpose of equalization under the Family Law Act in Ontario.
Like an employment pension and CPP, income from a disability pension will ordinarily be considered income for support purposes.
Contact our experienced and solution focused team of Family Lawyers to assist you determining how your pension impacts the issues in your Family Law dispute.
