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We're not married. What happens to our pensions if we separate?

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We're not married. What happens to our pensions if we separate?

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Reviewed: 
September, 2015
Answer

A pension is a plan that pays its members after they retire. Sometimes a pension also pays after a member is fired or laid off, becomes disabled, or dies.

The Canada Pension Plan (CPP) is a special type of pension. You can apply to divide CPP credits that you and your common-law partner earned during your relationship if you lived together for at least one year.

For other types of pensions, partners in a common-law relationship do not automatically have a right to share in the value of each other's pensions. This is not true for married partners, who have different rights.

When common-law partners separate, the pension plan member usually keeps the full value of the pension.

They only have to share in the value of their pension if they have an agreement, court order, or arbitration award that says they have to share it. A court or arbitrator will only say that a pension needs to be shared in limited situations since common-law partners don’t usually share property.

1. Think about sharing your pension

The pension plan member only has to share the value of their pension with their common-law partner if it says so in an:

To get an arbitration award or court order, you normally need to show why it is would be unfair for the pension plan member not to share the pension. This is called an "unjust enrichment" or trust claim.

The most common example is by proving an "unjust enrichment". This means that it would be unfair to allow your partner to leave the relationship without sharing their property. This can be hard to prove.

To make this claim, you have to show that:

  • you contributed to the property,
  • your partner benefited from your contribution, and
  • there is no reason for your partner to keep this benefit.

Your common-law partner could share the value of their pension by making a payment to you. For example, they could pay you $10,000 to settle your claim to a share of their pension.

If you agreed to share a pension in a domestic contract, or have a court order or arbitration award that says you have a right to share in your partner's property, you can ask the pension plan administrator to divide the pension. You can do this only if you and your partner have:

  • lived together for at least 3 years, or
  • lived together and have a child together.
Reviewed: 
October, 2016
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2. Ask if the pension follows provincial or federal rules

How to value a pension and how you can divide it depends on whether the pension follows provincial or federal rules.

Most people in Ontario with a pension have an Ontario regulated plan.

However, there are also two types of federally regulated plans:

  • A federal public service plan: If you or your partner worked for the Canadian government, you might have a federal public service plan. For example, if you worked for the Canadian army or the Royal Canadian Mounted Police.
  • A federally regulated plan: If you or your partner worked for certain types of non-government employers, you might have a federally regulated plan. For example, if you worked for an airline, bank, or railroad.

You can contact the pension plan administrator directly to ask them which rules they follow.

Or you can contact the provincial or federal office that makes rules about and supervises pensions:

Reviewed: 
September, 2016
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3. Get the pension valued

Ontario regulated plans

Before January 1, 2012, there was no standard form that you could use to get the pension valued. So you had to hire someone like an actuary to value the pension.

After January 1, 2012, you use a standard form to ask the plan administrator of an Ontario regulated pension plan to value a pension, unless you have a court order, arbitration award, or domestic contract that was made before January 1, 2012.

Because you're not married, you and your common-law partner are don't automatically share a pension.

But, if you're going to share a pension, only the pension plan member can ask for the pension to be valued by filling out a Form 1 - Application for Family Law Value. They may also need to fill out other forms.

If you need help filling out the form, the Financial Services Commission of Ontario has a Family Law Forms page that has a User Guide for each form and Q&As for some of them. Form 1 also has a video tutorial.

Part E of Form 1 asks for a "Starting Date of Spousal Relationship (Married or Common-Law)" of your spousal relationship. This is the date that you and your common-law partner started living together unless you have a court order, arbitration award, or agreement with a different date. Then a later date can be used.

Part F of Form 1 asks for a "Separation Date (Family Law Valuation Date)". This is usually the date of separation. You can provide one date or, if you and your common-law partner don't agree on the date, you can provide 2 potential dates. If you provide 2 dates, then you and your partner both need to fill out some of Form 1. Your application is then treated like 2 applications, with each application using a different date.

The plan administrator can charge a fee for valuing the pension. Depending on the type of plan, they can charge from up to $200 to $800. If you and your partner have asked for 2 valuations based on 2 different dates of separation, you may both be charged a fee.

After the plan administrator receives the completed application and the fee, if any, they have 60 days to provide a "Statement of Family Law Value" form. This form is sent to both partners and gives the value of the pension. If you and your partner have asked for 2 valuation based on 2 different dates of separation, you get 2 "Statement of Family Law Value" forms.

Federal public service plans or federally regulated plans

Each pension plan is unique. You may be able to ask the pension administrator to provide you with an estimate. You can also hire a financial professional, usually called an "actuary", to value the pension.

Reviewed: 
September, 2016
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4. Decide whether to divide your pension

Because common-law partners don't automatically have to make an equalization payment at the end of their relationship, they need to show why they have a right to a share of their partner's property. This can be very hard.

If you agreed to share a pension in a domestic contract, or have a court order or arbitration award that says you have a right to share in your partner's property, the pension plan administrator may be able to divide the pension in different ways. For example, it may be able to make:

  • a one-time payment,
  • monthly payments, or
  • adding to a separate pension or fund that is like a pension for the partner that isn't a pension plan member

The options for dividing the pension depend on if the pension member started receiving the pension payments, usually because they retired, before you separated.

In general, the maximum amount of the pension that paid to the plan member’s partner is 50% of the value of the pension or monthly benefit.

Ontario regulated plans

For Ontario regulated plans, the option to ask the plan administrator to divide the pension is only available if you have a court order, arbitration award, or domestic contract that deals with your pension that is dated after January 1, 2012.

Before this date, you could only divide the pension after the plan member retired, died, or reached the normal retirement age to access their pension.

Also, the option to divide a pension with a common-law partner only applies if the partners have a court order, arbitration award, or domestic contract and have:

  • lived together for at least 3 years, or
  • lived together and have a child together.

Federal public service plans or federally regulated plans

For a federally regulated plan, the option to divide a pension with a common-law partner only applies if the partners have lived together for at least one year.

Reviewed: 
January, 2017
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5. Apply to divide your pension, if needed

Ontario regulated plans

You have to tell the pension plan administrator if you wish to divide the pension, and how much of it you are dividing under your court order, arbitration award, or domestic contract.

When the plan administrator gives you the value of the pension, they also give you forms and instructions on how to ask them to divide the pension.

You can also read The Financial Services Commission of Ontario's Family Law Forms page, which has the forms, a User Guide for each form, and Q&As for some of them forms. Either you or your common-law partner can apply to divide the pension, it doesn't have to be the plan member.

The plan administrator has 60 days after receiving your complete application to divide and pay your share of the pension. They cannot charge a fee to do this.

Federal public service plans and federally regulated plans

There is no standard form. You should contact the pension plan administrator for the form you need to fill out to ask for a division.

Reviewed: 
October, 2016
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Learn more about this topic
CLEO (Community Legal Education Ontario/Éducation juridique communautaire Ontario)
National Association of Women and the Law
Ontario Ministry of the Attorney General
Financial Services Commission of Ontario (FSCO) / Commission des services financiers de l'Ontario (CSFO)

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