Pensions can be an important asset that can be subject to division during a divorce in Ontario. The division of pensions can be complex and can depend on several factors, such as the type of pension and the length of the marriage. In this article, we will explore what happens to pensions during a divorce in Ontario and the factors that can affect the division of pensions.
Types of pensions
There are several types of pensions that may be subject to division during a divorce in Ontario. These include:
- Defined benefit pension plans: These plans provide a fixed income for the retiree based on factors such as length of service and salary.
- Defined contribution pension plans: These plans are funded by contributions from the employee and the employer, and the income in retirement is based on the contributions and investment returns.
- Canada Pension Plan (CPP): CPP is a government-run pension plan that provides retirement, disability, and survivor benefits.
Division of pensions during a divorce in Ontario
In Ontario, pensions are considered to be property and can be subject to division during a divorce. The division of pensions can be complex and can depend on several factors, such as the type of pension and the length of the marriage.
The first step in the division of pensions is to determine the value of the pension at the date of separation. This is usually done by obtaining a pension valuation report, which provides an estimate of the value of the pension. The report will take into account factors such as the type of pension, the length of service, and the employee’s salary.
Once the value of the pension has been determined, the parties can negotiate a division of the pension. This division can take several forms, such as:
- Equalization payment: One party can receive an equalization payment in lieu of a share of the pension.
- Pension sharing: The parties can agree to share the pension income in retirement.
- Pension division order: The court can issue a pension division order, which requires the pension plan to pay a portion of the pension income to the other party.
Factors that can affect the division of pensions
Several factors can affect the division of pensions during a divorce in Ontario. These include:
- Length of the marriage: The longer the marriage, the greater the likelihood that the pension will be subject to division.
- Contribution to the pension: If one party has made a greater contribution to the pension, they may be entitled to a larger share of the pension income.
- Age of the parties: The age of the parties can affect the division of pensions, as the party closer to retirement may be entitled to a larger share of the pension income.
- Other assets: The division of pensions may be affected by other assets that are subject to division, such as the family home or other investments.
Conclusion
In conclusion, pensions can be an important asset that can be subject to division during a divorce in Ontario. The division of pensions can be complex and can depend on several factors, such as the type of pension and the length of the marriage. The parties can negotiate a division of the pension, which can take several forms, such as an equalization payment or pension sharing. TCZ Lawyer Eric Zhao can help guide you through the process and ensure that your rights are protected.