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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 11-27-2016, 12:29 AM
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Default Company paid Pension vs. RRSP matching

Not sure if anyone has had this situation: While studying both our financial documents, I found the following:

Her company paid DB pension contributions are non-taxable and therefore not included as income on her tax returns (about $9,500/year).

My company does not have a pension plan. Instead, they offer an RRSP match program. I also receive about $9,500/year in the match program but it is treated as taxable income and adds to my line 150.

So.. for the purposes of calculating set-off child support amounts, I am penalized for contributing to my retirement in the form of an RRSP while she gets to enjoy her retirement being paid for tax-free.

I feel that either I should be able to exclude the RRSP match OR she should have her pension contributions inputted as income.

Any thoughts would be appreciated.
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Old 11-27-2016, 10:55 PM
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I think your analysis is correct.

I would consider calculating offset support either including both employer contributions or excluding both from the calculations. Then state that as the level of CS to be paid this year. She can take you to court if she disagrees.

Now... that said, most judges won't understand, so if she actually drags you to court be prepared to surrender rapidly.
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Old 11-28-2016, 01:07 AM
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I'm kind of concerned that this may just be one of those differences between how a pension plan and RRSPs work that divides people on which one is better. It depends on the circumstances, and clearly, you are in the circumstance where RRSPs are worse. But I'm not sure there's going to be anything you can do about it.

But there's certainly no harm in trying to negotiate it differently!
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Old 11-28-2016, 08:41 AM
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There have been successful arguments to not include it. Those arguments involve unreliable or different amounts yearly. For instance, my partners company contributed to an RRSP and when he lost his job it was rolled into his personal RRSP without him ever seeing the money. His lawyer said that was not income. If he had been paid it, it would have been income. If you dont see that money and it varies each year then you may be successful in not including it. Technically it is income just income you wont see for a number of years. Like others say, decide if its worth $5000-10000 in court!
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Old 11-28-2016, 11:04 AM
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I actually found 2 cases where the employer match portion is excluded:

http://www.canlii.org/en/bc/bcsc/doc...&resultIndex=1

http://www.canlii.org/en/bc/bcsc/doc...&resultIndex=3
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Old 11-28-2016, 11:47 AM
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Interesting. RRSP contributions are not counted for CS.

Quote:
[37] There is no dispute about the husband’s obligation to pay child support. His total income in 2015 was $124,029. The parties have agreed that certain deductions for employment expenses are appropriate, and I agree with counsel for the husband that a further deduction is appropriate to reflect employer RRSP contributions over which the husband has no discretion: Redlick v. Redlick, 2013 BCSC 1155 (CanLII) at para. 60. In the result, his Guideline income is $115,242 requiring child support of $2,174 per month.
I think that is enough evidence for you. Exclude those contributions from your CS calculations. Good find!
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Old 12-06-2016, 06:25 AM
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If you read some of my prior posts, this is one of the many reasons why Line 150 is NOT income for child and spousal support purposes.

A matching RRSP contribution is included for tax purposes on Line 104 of your tax return. Company contributions to a defined benefit pension plan are included on Line 206. They are not included in income and are just there to reduce your RRSP contribution limit.

Obviously the company contributions to your RRSP should be excluded from income. However, when dealing with Family Court, you are dealing with financially illiterate lawyers and judges. I have experienced this battle.

I also went to trial and won on this point. Of course that was after I overpaid child support (which I never got back). After I explained it to the Judge so she could understand and she ruled in my favour, I said "Was it really necessary to go to trial on something so obvious?" There was silence.

On a positive note, I made a submission to Justice Bonkalo's review (which is due out December 31st so watch for it) where I railed against the financial illiteracy of lawyers and judges and how they are the complete cause of protracted litigation. Lets see if something is done.

On another note, the Advocates Society wrote to Justice Bonkalo saying that there is no need for third parties to help lawyers financially as they are completely qualified to handle it.

Then of course they offer this course.

The Advocates' Society | Promoting Excellence in Advocacy | Financial Literacy for Family Lawyers

Nothing like talking out of both sides of your mouth!! LoL
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