Is my spouse pension divided in a divorce?
Yes. Pension plans are included in the equalization of net family property calculation. The value accrued during the marriage is included in the pension holder NFP. The method of division depends on the type of pension — defined benefit pensions require actuarial valuation.
Key Points
Yes. Pension plans — both defined benefit and defined contribution — are included in the net family property calculation for equalization purposes.
Only the value accrued during the marriage is included. Pre-marital pension credits can be excluded with proper documentation.
Detailed Answer
Under Ontario Family Law Act, pension plans are property subject to equalization. The pension value as of the date of separation is included in the pension holder net family property. The value accrued before the marriage can be deducted as a pre-marital exclusion, provided it can be properly documented.
Defined benefit pensions — particularly government and public sector pensions — require actuarial valuation to determine their present value. This is a technical calculation that requires expert input and can be one of the most contested aspects of a high-net-worth divorce.
For defined benefit pensions, Ontario allows two methods of division: the pension can be valued and the value included in the equalization calculation (with the non-member spouse receiving other assets in lieu), or the pension can be divided at source under Ontario pension division rules, with each party receiving their own separate pension entitlement.
For defined contribution plans, the calculation is more straightforward: the value of the account at the date of separation is included in NFP, with a deduction for any pre-marital contributions.
Pension division is a technically complex area. To ensure your pension assets are properly addressed in your divorce, contact Miao He at 647-930-6688.
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