A pension plan is a marital asset, subject to sharing as part of the marital property in divorce law.
A capitalized valuation of the pension must be done; this usually requires the assistance of a pension valuator. The figure the valuator arrives at is placed into the calculation of the assets, debts, and liabilities of the parties and may result in one party keeping a larger proportion, if not all, of the other person’s share potentially of a home if the only two main assets are the home and the pension.
Provincial pensions on the whole cannot be divided at source, although some federal pensions do allow for division at source into two income streams the parties will share, therefore separating the pension from the other assets. Federal government pensions and university pensions can be divided at source.
There is a way, not commonly used, to share the value of a pension which cannot be divided at source and where no other asset can fund the money owed due to the presence of the pension. This is called an “if and when” agreement and requires great care in the drafting of the agreement and life insurance to protect the proceeds, should a spouse die before the other spouse has received all of their entitlement.
Pension plans, pension-plan division, calculation of rights, entitlement, and quantum are complicated, and you should consult with a family lawyer in dealing with any issue of pension plan entitlement and division.
Judith Holzman is a collaboratively trained family lawyer who has practiced for over 33 years in the Toronto and York Region area. She has participated in amendments to the Family Law Act (provincial) and the Divorce Act (federal) in the area of religious divorce.