New divorce rules for splitting pension assets
When a couple is divorcing, things are generally split down the middle. The person with the more substantial net worth generally pays half the difference to the other person. This is known as equalization of family assets, the largest of which, other than the family home, is often a pension plan.
Pension plans are the trickiest assets to divide, however, both because they’re not valued in terms of a current balance the way RRSP accounts are, and because they generally can't be liquidated prior to retirement age.
This can lead to more conflict since most parties typically want to settle all of their marital property issues as soon as possible so they can simply get on with their lives.
But all this is finally changing.
Earlier this month, the Ontario government released draft regulations regarding the division of pension assets when marriages fail.
The new rules have disposed of “if-and-when” arrangements that, in the past, meant that non-member spouses couldn’t get their hands on the money until their husband of wife left their job or retired.
The draft regulations require the immediate settlement of a claim by a separated spouse for both active and inactive plan members.
That means it will be possible to apply for an immediate transfer of up to 50% of the pension’s value to another pension plan or RRSP. The money can also be left in the member’s pension plan.
The new rules also make plan administrators responsible for the valuation of pension assets for family law purposes as well as ensuring that any settlements are completed according to the legislation.
That means those who separate after retirement won’t get the “sorry, not really our problem” response and will instead be able to apply to the administrator for an immediate division of the pension.
You can review the draft regulations here and can comment on these regulations until April.
Have you had trouble getting a fair split during a divorce? Would this rule change have helped?
By Gordon Powers, MSN Money
Posted by: Icecube | Mar 15, 2022 3:43:01 PM
Hum. all this emotion. Men vs. Women... all about $.
Most men I know who got divorced got cleaned out of everything: house, pension, money, cars and - the kicker, the kids as well. Their exs took them and moved out of town. The house, pension and money is replaceable, but the kids? Why do you think that fathers commmit suicide or hang banners on bridges (ref. Montreal). If they would do so to their ex wifes you would have every politician cry murder! Not easy to be a male these days. I am not bidder: I have a wonderful loving wife and a great friend and companion for life. But I am a minority...
Divorce laws are lopsided for women in a majority of the cases. Accept it. Don't get married is what I tell my 2 boys, and I am happily married! My wife and mother don't like it when I tell them that, but she agrees as she saw the impact of "best girls friends" cleaning out the husband.
I worry about my boys. I hear what women say at work about "cleaning their exs" and it scares me for them. Would I marry if I was younger? I don't know. When I did, in Québec, we signed a pre-nup and at least it was clear from the get go -- about the division of assets. But really, now, going for the kids and destroying the reputation of their fathers? No thanks. I think my boys will be happy as singles males with all the positive that comes with that.
Now that some women are starting to make more money than their husbands, things might change to protect the "women's worth". But such is life.
Posted by: Matrimonily Beaten | Mar 15, 2022 3:46:36 PM
Married for 11 years. Was in Western Canada working to complete my wife's dream home. (her idea ... big money = big returns on investment in property) Away for a very short time. Upon return found 2 pairs of jeans and 2 shirts......empty bank account (joint account - not smart on my part)
Please explain how this 50/50 thing works?
The laws need to be changed.
This happened to me 5 years ago and I still have no final divorce................she won't end it.
Just an autograph, only an autograph.
I could care less about the material possessions or the money she took when she left, I would simply like to have it completely finished...... Too much to ask i guess.
Posted by: Susan | Mar 15, 2022 3:48:33 PM
Did any of you see that she is 73 yrs old ?? how many 73 yr old get back in the work force? What a bunch of mean comments
Posted by: Matrimonily Beaten | Mar 15, 2022 3:51:22 PM
equality after the breakdown of a marriage does not exist..... sad but very true.
Posted by: DDD | Mar 15, 2022 3:52:37 PM
I have been trying to get divorced for four years……..one child is going to cost me 3,500.00 a month. My X will be making more than me in a year and most of it will be tax free in her hands……..This is just another example of the un-fairness of the system……..Plus they have now been re-opening divorces that where settled years ago as the laws change……How is any person to get on with there lives with this happening……..As for this new rule just one more way of SUCKING cash from the other person.
Posted by: don | Mar 15, 2022 3:55:40 PM
I know lots of men who will no longer even consider marriage....and to take it one step further......wont get involved with women with childern in case they end up being responsible for
childern that are not theirs. I do believe in the case of a long term marriage, pensions need to be split fairly. Circumstances do vary and this is what makes it so difficult to write a one fits all law. Should the stay at home Mom who refused to work when the childern went to school be able to force someone else to pay for a decision she made? If staying at home was agreed on by both parties...another matter. If the husband insisted he wanted a saty at home wife...another case. CPP make provisions for time raising childern .
The other factor is the wage differences between men and women. Men can generally rely on a
larger retirement income just due to the fact that even if both worked for years....men make more.
But maybe in contributing to pensions ,a decision was made to pad one as opposed to the other becasue it was more benefical (eg: employer matched contributions for one plan and not the other)No good answer. Each case, is different and these one fits all rules do not promote fairness. I feel the difference between what should happen when a a 20 year marriage fails and one that lasts 3 are worlds apart. I know many a woman who got the short end of the stick and many a man who did.
Posted by: Matrimonily Beaten | Mar 15, 2022 3:59:04 PM
DDD.......I feel for you. Fortuately my (hopefully soon to be) EX had no children together, she had one from a previous marriage which I raised for 11 years. (deadbeat bio father) She had approached her lawyer with the notion of child support from me for him but I told my lawyer to fight it. Her first makes 30K more a year than I do so why should support his kid any longer than I already had?
She is a real sweetheart.........
Posted by: Icecube | Mar 15, 2022 4:06:08 PM
Don
I never ven thought about "wont get involved with women with childern in case they end up being responsible for". I need to warn them of this as well. Thanks...
What really scares me is that these are really nice women at my work place talking about "cleaning their exs" and having "encouraged my girlfriend to take everything she could out of "him"". I mean, they are sweet, nice, intelligent, compasionate and gentile in all other circumstances. Surely there must be decent women (and men) around, but one cannot tell them apart from the potential abusers. Is it that any women is a potential abuser of the system, and with inpunity? Should that be our "default" assumption? I guess so because now that "it is the law", it becomes "their g_d-given right to clean their exs". It becomes an entitlement.
What can a father tell his sons about "what" and "who" to watch out for"? Help!
Posted by: Sal | Mar 15, 2022 4:06:56 PM
Yes, every case is so different. My husband wanted me to work full time when the kids were babies, AND look after his ill/needy parents in our house. I chose part time but had to listen to his complaining, and he refused to budget. Now I have my own health issues, and can still only work part time. His parents are gone, kids are grown, we're divorcing after 25 yrs and he's fighting me all the way even though he now earns well over 100k yr.
Posted by: Drayl | Mar 15, 2022 4:57:14 PM
Thank God Ill never Marry, you all can fight amongst yourselves. Im going fishing.
Posted by: Guesswho | Mar 15, 2022 5:06:49 PM
Where does it end? I worked less time than my ex and worked in an industry that made more money than he did, thus my pension was larger. In the end, he received 50% of all assets, moved in with his girlfriend and her child. I fought for every cent of child support and support while they were in university, I did that for my kids. I dont mean to sound harsh if it comes off that way. But 50/50 is the way it is today, I'm just happy I protected myself and was able to move on, still helping the kids at 21 and 25 when they need some financial support. We all do the best we can, with the cards we're dealt. Good luck to all
Posted by: dubcik | Mar 15, 2022 5:37:20 PM
What about men who re-marry? What happens when the pension has grown while married to his second wife, but when they retire the first wife comes swooping in 30 years later, taking 1/2 the money and depriving them of a retirement together? Sounds like another stupid plan to make divorced men pay and pay and pay and pay and pay and pay.
Posted by: Crystal | Mar 15, 2022 5:38:52 PM
Having been the woman who got "taken to the cleaners" by my ex-husband, i agree with one fact, don't judge till your in that position. Divorce definitely brings out the money grubber in people, regardless of situation, some just do it for hurt. Point being, when you get married, you sign on for a partnership, that means carrying each other when need be, and being the one who gets carried. Not every situation works out perfect, as for having respect for yourself, when your the one who's facing an uncertain future, watching someone else take everything you had and not give a crap, you'll do what you need to. Instinct to survive says you would go after that pension, and whatever else it takes to make sure you don't drown. The Canadian divorce laws are flawed . if you've been through it, then you'll know it comes down to what the judge wants to do, and whose money bought the better lawyer. I say go for it, if your situation meant that you were financially less stable then your partner, then go for the pension. This law just means that it will be dealt with faster, and not something you have to think about for years to come.
Posted by: cusucoguanaco | Mar 15, 2022 5:48:31 PM
I believe that in a divorce egverything should be split half and half.
I am a man. I love my wife and children and if this were to happen to me I would gladly give my wife half of my everything.
cusucoguanaco
Posted by: don | Mar 15, 2022 6:09:53 PM
As long as there is marraige and divorce it will never end. People should not be forced to stay in bad marriages (as it used to be) BUT the commitment to marriage is not what is should be. Too many quit to soon. Life is not all roses. There are good times and bad yet less people seem to be willing to work through the bad times. I have sons and not daughters and unfortunate as it is I do warn my sons. Not to NOT get involved but to slow down....give it time and make sure who you think you are with is who you actually get. I have not seen many instances of moving iin and have child with someone you have known for 6 months lasting very long. A person, male or female, can hide thier true colors for awhile but it is much harder to do long term. You should not be committing or having childern with a person you have known for a few months....years is a better idea if you want to keep your marriage happy and your family (when you have it/ & hopefullyl planned) intact. The pendulum has swung. For years men were not held accountable for the care of their childern and/or spouses. Now it seems to have gone to far the other way,in some aspects. Someday maybe there will a happy medium which willl alow an fair distribution of assets and the freedom for the all parties to move on and build a life better .
Posted by: stacy | Mar 15, 2022 6:25:16 PM
i fighting for four years to divorce.i offered 1/2 of my pension small though it is ....all the proceeds from the sale of the house and all recreation vehicles.im only keeping a clunker car.she still wants more so guess it is off to court.four years fighting.so i agree with gulp ...no more marriage for me
Posted by: Cathb | Mar 15, 2022 6:45:57 PM
In respone to Betty's comment - you might feel different if he left you high and dry and immediately moved on to share those assets and pensions with another.
Unless maybe you never had children and have moved up in the work world and are now earning more than him.
Posted by: Clear & Focused | Mar 15, 2022 6:47:34 PM
@ Gulp. Thank you. Chip’s, Cindy’s and your comments were the only rational ones posted. It’s like you say: “Just one more reason for men to avoid marriage”. In fact Mona’s comment says it all.
I will never, repeat, NEVER get married; strictly because of the new rules they come out with constantly. A man would have to be a fool. It hasn’t even been a couple of weeks since they changed the laws regarding common-law splits… Men can’t even protect themselves by avoiding marriage and opting for co-habitation instead these days. Therefore, every guy now has to be a fortuneteller who’s able to see past the initial act that all women play in order to discern if the act is just a prelude to the legal nightmare which statistics say is soon to follow.
For all the guys out there thinking of getting married – you are delusional. There is a reason that they disproportionately stack divorce incentives in women’s favor, and it has nothing to do with equality…
Read “Brave New World” by Aldous Huxley and you’ll start to get an understanding. You see, the powers that be don’t care about women’s equality. What they care about is stifling overpopulation by creating fear in men towards settling down; which thereby helps to keep procreation rates down… incidentally, this is the same reason the government (and Rockefeller-funded Eugenics organizations) tricked all you ladies into poisoning yourselves with the pill. (Ever wondered why there has been a surge in pre-teen female puberty, the feminization of boys, along with trans-gendered / hermaphroditic people??... Keep popping those anti-androgen pharmaceuticals and poisoning the water-table! Go-feminism!).
Sadly, this is not the only reason they are forever changing rules in women’s favor. You see, these are plutocratic times we live in. The only thing that stands a chance at changing it is a strong family unit in opposition to the state (or more specifically: focused, non-violent, males rebelling against authoritarianism, while buttressed by the incentive of a supportive, stable home).
The powers that be know this. So when over 55% of married men end up divorced and then forced to support a deadbeat ex-wife – well then most of his day goes into paying for the deadbeat and not much time is left over to start a political research project… or any project that will help lift him out of servitude.
I could go on, but what’s the use… the majority of people on this article are only females looking for the latest government-approved swindling tactics.
Posted by: Chumpy | Mar 15, 2022 6:50:56 PM
The laws in place are there to support and protect the spouse that stays home to raise the family while the other goes to work. In this sense, they make sense. What's unfortunate, is the fact they become laws. When that happens there is a separation between what is fair, and what is legal (not always, but more often than not). That's when it gets bitter. The laws should address this more. It cannot be determined fairly by charts, and it has nothing to do with women or men, only two spouses.
Posted by: Vinny | Mar 15, 2022 7:05:56 PM
There are many women out there who took advantage of their husbands pension; they broke the marriage for no reason at all just because they know they can get half of their husbands` pension. I don`t see any justice in that. I call that "greed" in the women`s part. I know men who were working six or even seven days a week , twelve hours a day and their wives did that. In my opinion, if a man was cheating on his wife she has a right to do that, but an honest man, good provider shouldn`t have to let his wife to get half the pension. Let justice be justice, the one at fault should suffer, not the innocent.