New pension rules on marriage breakdown offer relief
With the value of a pension representing the largest store of wealth for many families, Ontario’s new rules for dividing pension assets when marriages fail are welcome news.
Despite separation agreements or court orders, the current rules don’t allow money to be transferred to the ex-spouse unless the member has already left the plan, through termination, death or retirement.
Now, once the rules kick in, the value of the pension can be settled immediately even though the plan member is still working.
The value will be available as of the marriage breakdown date, and the ex-spouse can either transfer it to a locked-in retirement account, remain in the plan to his or her credit, or switch to another registered pension plan if the plan allows transfers in, pension expert Ian Edelist told Benefits Canada.
If the pension has already started when the breakdown occurs, the pension is simply split although it may be reassessed so that both parties receive a pension based on their own life expectancy.
“The default position might be that the ex-spouse receives a pension while the member is alive; once the member dies, the ex-spouse’s pension stops and [he or she] will receive a survivor benefit of 60%," Edelist says.
Have you had trouble freeing up pension assets after a separation? Do you think these new rules may help?
By Gordon Powers, MSN Money
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Posted by: Michael Lemmermeyer | Jun 23, 2021 10:36:09 AM
when both spouses in the course of a marriage or relationship accrue the asset and security of one or both pensions then of matter of fact in a marriage or relationship dissolution it can be mutuallly decided to share a segregated asset that of a pension ie allowance to the remaining spouse. most people at this stage in life having attained this security i would personally say that an amicable breakup would be mutually advantageous to reunite each others independence and collectivelly reassure that the lifeline between dependant children is not lost or severed in litiguous fallout.
Posted by: adriana silva | Jun 23, 2021 3:49:37 PM
I am happy for this new law because im in that situation right now....
Do you know when this law starts?
Posted by: Rob | Jun 23, 2021 5:57:10 PM
Women just get more and more. When does it stop
Posted by: Al J | Jun 23, 2021 10:00:15 PM
I do not believe a pension should even be considered to be split in a marriage breakdown, irregardless if it is either person. In many instances this is depended upon.
Posted by: Sic*and*Tired | Jun 24, 2021 10:12:56 AM
I feel that ex spouses should only be entitled to a percentage of their ex spouse pension and only when the person retires or pasts away. They should not be allowed to have direct access to the money upfront. It should be incorparated into their own pensions on upon the ex spouse retiring.
Posted by: Canuckguy | Jun 26, 2021 10:24:13 AM
@Rob who stated "Women just get more and more:
There are 185,000 dead beat dads listed in Ontario according to some recent news article and a very very small number of what can be considered dead beat moms. On the whole, the women get the shaft much more often in a marriage breakup.
Posted by: bill lafosse | Jun 26, 2021 4:10:58 PM
As long as this is voluntary, not manditory and the pension split is based on the number of years the couple was together while the pension was acrued this fair enough.
If it is manditory it is B.S. and Rob is right.
Posted by: JP | Jun 26, 2021 4:28:27 PM
@Canuckguy You've got to be kidding...The fact that the laws are 1 sided as "Rob" has stated needs to be addressed. So you make a 100K salary that you got due to your education, then you get married, followed by a divorce and the other person gets a settlement that entitles them to so much support you can't afford to live on your own and most are forced to either move back home with their parents is rediculous. Yes there are dead beat parents out there, but address that issue, dont paint with a wide brush
Posted by: Debbie - Calgary | Jun 26, 2021 5:07:31 PM
There should be a Canada wide rule, and it should be "smarten the shit up and marry the right person for life" law. Then the rest of it doesn't matter.
Posted by: Kasee | Jun 26, 2021 5:58:16 PM
@Debbie... Way to cut to the chase...kudos. It is, however, far too easy to be hasty in getting married, far too more easily to quit on working on the relationship, and far too easy to compound the marrige with children, than to regard the marriage as a life long committment. sigh........
Posted by: C. | Jun 26, 2021 9:48:31 PM
Where we are?
Posted by: Garry | Jun 26, 2021 10:21:15 PM
it doesn't stop because they know that if they make women happy thats how they get control of men, they use woman to direct men.
Posted by: Nate | Jun 26, 2021 10:39:10 PM
In a country where they claim the focus is on the family. They just keep coming up with more and more incentives to pay people for breaking up. Whenever those idiots who make the rules figure this out and not make it pay to break up. The list of single parents will keep going up. For you women who applaud things like this, remember this the next time you and your girlfriends are talking and saying " why is it so hard to find a good man"?. Most of the good men are very wary of getting involved in marriage or a long term relationship. I think it's time to stand up for fairness. What's good for the goose should be good for the gander.
Posted by: Robert | Jun 26, 2021 11:42:31 PM
Governments going about this all wrong. It should be automatic when you get married that you agree to a prenumptual. It would require both parties to sign out of a prenumpt. This would prevent courts and governments from taking what is unconditionally one persons's wealth.
I refuse to get married since the only winners in marriage are women and the government from a finanacial point of view.
Posted by: JP | Jun 27, 2021 3:20:14 PM
@Robert, Prenupts arent even worth the paper they are written on, if you have a decent lawyer. Give one a call and you'll find out.