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  • Pension value ... wow!

    Can someone correct me here.

    My understanding of Pension value when used for equalization of assets is this ... (I'll keep it simple here)

    Basically the pension is valued at what would the person be able to pull out today every month multiplied by a number of years into the future.

    So lets say that a person's pension entitlement was to be 400 dollars per month from today and lets say that it was determined based on their current age and all that they would be able to pull this out for the next 40 years. Would the pension value be calculated at 4800/year for the next 40 years equaling close to 200000???

    I know this is simple and that there may be other factors such as indexing and such ... I'm just trying to get a handle on Pensions and the impact they can have in determining equalization of assets.

    Thanks

    Hubby

  • #2
    From what I recall, you take the value of the pension, adjust for taxes and that's it. Think of it like an RRSP.

    This is strictly speaking for equalization. Not going after the income from CPP, pensions, RRSP's, etc., for SS, CS, on and on.

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    • #3
      Ccp

      Can an ex have part of your CCP? If so I did not know that....my seperation agreement is a mess and we are now going to court for CS, can I revisit the CPP also?

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      • #4
        Like I said, I haven't looked at this in a while. For equalization, I think no.

        But, there can be a claim on a portion CCP for survivor beneifits and credits.

        http://www.sdc.gc.ca/en/isp/pub/factsheets/credit.shtml

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        • #5
          CPP credits can be equalized during the time of cohabitaion and or marriage

          see this link on the subject


          lv

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          • #6
            Calculating Pension values - Rule of thumb

            Found this snipit from the web in regards to valuing a Pension - in general.

            "Simple rule of thumb when it comes to valuating a pension or a stream of cashflow, “For every $100 per month of income, you have an asset worth $18,000.”

            If you have a pension that pays you $3,000 per month, that pension is worth $540,000. If you get $800 per month from CPP, then that is worth $144,000. $500 per month from OAS is the equivalent of $90,000."

            Question: I know one is entitled to a Pension Plan, however I was not aware that one was entitled to CPP values as well???


            Hubby

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            • #7
              you don't have to equalize CPP. You simply have to advise the government that you have divorced and they split the credits between the spouses for the duration of the marriage. Then you both receive your portion at your respective retirements.

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              • #8
                Hubby,

                Here is a case that contains a good equalization example and includes pensions and RRSP's.

                http://www.canlii.org/on/cas/onsc/20...onsc13193.html

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