Marriage Breakdown - Bill 133 and the Pension Benefits Act
New rules came into effect on January 1, 2012 that impact the process of pension asset division on marriage breakdown.
As of January 1, 2012 a division of pension assets cannot be processed unless the Plan member (or his or her spouse) requests a Statement of Family Law Value which provides information about the value of the pension entitlements earned during the spousal relationship. The forms are administered by the Financial Services Commission of Ontario (FSCO), which has also posted a number of questions and answers to assist applicants in this process.
Please Note: In order to provide the Statement of Family Law Value, copies of certain documents are required as well as payment of a fee as the Queen's Pension Plan is a hybrid plan, the fee is $500.
Once a completed request for a Statement of Family Law Value and the required fee have been received by the Pensions unit of Human Resources (Fleming Hall, Stewart-Pollock Wing), the statement will be prepared and sent to both the Plan member and his or her spouse within 60 days. The statement is designed to be used in connection with all other relevant information to arrive at a settlement of family property, which may take the form of a separation agreement, a family arbitration award, or a court order. Note that the settlement may not ultimately require that pension plan entitlements be divided; but if the entitlements are to be divided, the Pension unit will require a copy of the separation agreement, family arbitration award, or court order dated on or after January 1, 2012 that specifies the dollar value or the percentage of the pension entitlements that are to be transferred to a former spouse.
A few additional points to keep in mind:
- Transfers to a spouse cannot be more than 50% of the pension plan entitlements earned during the spousal relationship.
- The new legislation will provide for immediate transfer of funds to the former spouse. Prior to 2012, these funds could not be divided until the Plan member?s termination from employment, retirement, or death; under the new rules the transfer must be completed within 60 days of receipt of the appropriate documentation, and Plan member account(s) will be adjusted accordingly.
- A former spouse is no longer the required beneficiary for pension purposes, and so a Pension Beneficiary Designation (HR-FRM-003) form should be completed and sent to Human Resources.
For Plan members/former spouses who have a settlement order, award or agreement with an effective date prior to January 1, 2012 FSCO has stated that the new rules will not be applied retroactively. If you have questions, please contact FSCO directly at 1-800-668-0128 or email email@example.com.