Separation or divorce and your pension
Learn how a separation or divorce affects your pension and review the issues to consider.
How your pension is paid to you and your former spouse
If your former spouse becomes a limited member, they may be entitled to one of these payment options:
- A monthly pension
- A lump-sum payment to a locked-in retirement vehicle
Factors affecting your former spouse’s options include:
- Your age
- Whether you are eligible to retire (or have already retired)
- How you choose to receive your pension when you stop working (for example, as a monthly pension or a lump-sum payment, if you are eligible for one)
If you separate before you've started receiving your pension
If your former spouse becomes a limited member, they can receive their share of the pension when you reach your earliest retirement age. We will not contact your former spouse to let them know this date. They are responsible for applying for their share of the pension if they wish to begin receiving it at your earliest retirement age.
When you apply for your pension:
- If your former spouse is a limited member who has not yet started receiving their share of the pension, we will contact them to let them know about their pension options
- we will calculate your pension and your former spouse’s share of the pension, and pay their share directly to them
- If your former spouse is not a limited member but has claimed an interest in your pension by submitting Form P1 Claim and request for information and notice (or we have received a copy of your complete, signed separation agreement, registered court order or Form P9), we will contact them and give them 30 days from our written notice to become a limited member
- we will begin processing your pension as soon as we hear from your former spouse, or after the 30 days have passed (whichever is earlier)
- if your former spouse does not choose to become a limited member, we will pay you your full pension, and you will be responsible for forwarding your former spouse's share to them
If you separate after you've started receiving your pension
If you and your spouse separate or divorce after you retire, the pension option you chose at retirement will apply to both your share and your former spouse's share of the pension.
Your former spouse can apply to become a limited member of the plan if they provide a document that shows their entitlement to a pension. When they become a limited member, it allows us to pay their share of your pension directly to your former spouse. This way, you will not be responsible for dividing, then distributing, a portion of your pension to them.
If we pay your former spouse directly, the amount of pension that you receive will be lower as a result of your separation.
Depending on the pension option you chose when you retired, your former spouse may continue to receive their portion of the pension after your death.
If you die before you start receiving your pension
If you die before starting to receive your pension, the standard provision under the Family Law Act is that your former spouse is entitled to 50 per cent of the pension you earned during your relationship.
However, there may be circumstances where your separation agreement or court order specifies a different percentage.
To receive their share of your pension directly from the pension plan, your former spouse must apply to become a limited member of the plan within 30 days of our written notice.
If your former spouse dies before you start receiving your pension
If your former spouse is a limited member and they die before you retire and before receiving their share of your pension, we will pay their share to their estate or beneficiary. Your former spouse can only name a beneficiary if they are a limited member.
If your former spouse was entitled to a share of your pension and did not become a limited member before their death, their estate has 30 days from the date of our written notice to them to apply to become a limited member.
If your former spouse dies after you start receiving your pension
If your former spouse is a limited member and dies after you retire, you will receive their remaining share of your pension; it will not go to their beneficiaries.