Ottawa Divorce .com Forums


User CP

New posts

Advertising

  Ottawa Divorce .com Forums > Main Category > Financial Issues

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

Reply
 
Thread Tools
  #11  
Old 01-01-2018, 07:45 PM
denbigh denbigh is offline
Senior Member
 
Join Date: Jul 2017
Posts: 132
denbigh is on a distinguished road
Default

I am reading about pensions and very confused.

[QUOTEFirst, the Actuary will determine the Primary Value of the Pension and then the Value for the purposes of family law. The primary value will be higher and that will be the amount stated on that statement. (for example, the value on my statement was 11200$ higher than the value to be divided).
][/QUOTE]

So the primary value is the value you see on the yearly statement? And this value on the yearly statement is usually lower than the value for family law purposes? Why is that? I thought if you had an actuary to the real calculation shouldnt it be more, because you are taking into account the growth of the pension over time until retirement and not just the length of the marriage?


After reading this thread I went back to look at the numbers on my property table and my pensions are just the value stated on the yearly statement which is my contributions and interest. I assume my ex is the same, but I havent seen his statement, only my lawyer has and put it into the table for me. Does it make a difference if the pensions are old ones not being conributed to? I have a little pension from when I worked years ago and it just sits there (5000$) so mine isnt worth much anyways. My ex's is much more, close to 200000 and it is active, so does this make a difference in how it is calculated for divorce purposes? Is there a benefit to keeping half of the pension over taking that amount in home equity? My first inclincation was to take the value in home equity instead. If you do split pension half, then do you have to deal with ex spouse later on when retire, or do you each deal with the split pension and the pension company separately?
Reply With Quote
  #12  
Old 01-01-2018, 08:17 PM
denbigh denbigh is offline
Senior Member
 
Join Date: Jul 2017
Posts: 132
denbigh is on a distinguished road
Default

another question, how do you know what percentage to reduce the pension by for tax? Is it 20,25,30%? Is it based on how much the pension holder currently earns? What if you earn different amounts? my ex and I are in very different tax brackets. Also on my table all the investments, inlcuding RRSPs all have a percentage taken off, is that correct?

Last edited by denbigh; 01-01-2018 at 08:23 PM.
Reply With Quote
  #13  
Old 01-21-2018, 03:53 PM
mafia007's Avatar
mafia007 mafia007 is offline
Senior Member
 
Join Date: Nov 2014
Location: Ottawa
Posts: 274
mafia007 is on a distinguished road
Default

Quote:
Originally Posted by denbigh View Post
another question, how do you know what percentage to reduce the pension by for tax? Is it 20,25,30%? Is it based on how much the pension holder currently earns? What if you earn different amounts? my ex and I are in very different tax brackets. Also on my table all the investments, inlcuding RRSPs all have a percentage taken off, is that correct?


This is why you need to have the pension evaluated by an actuary. The value of the pension should be the value during the period of the marriage only. If you have accumulated a pension before marriage, it shouldn't show on your statement. So it is with what you have accumulated after the separation date (valuation date). If the total value of your ex pension (+/- 200k$) was during the time you were married, ask your ex to put the amount in her financial statement (as an asset) with the appropriate deduction for Notional tax purposes (debt section). That would be the tax level she would be paying at retirement. The actuary will do that calculation. You can argue it's 15% and she can argue it's 22% but the onus is on her to prove that so she needs to pay an actuary to do the maths. And don't pay for any actuary services, that's on her.


Once an actuary had determine the percentage for Notional tax based on the information provided to him, the same percentages should be used throughout the financial statements of both parties for all investments that can be withdrawn latter on. If you don't use an actuary, you and your ex must consent to use a tax level that are suitable to each of you. (this could be the bracket you think you will pay according to Revenue Canada when you retire. (eg. 15% for you and 18% for her).
Reply With Quote
  #14  
Old 01-21-2018, 11:56 PM
denbigh denbigh is offline
Senior Member
 
Join Date: Jul 2017
Posts: 132
denbigh is on a distinguished road
Default

so the tax rate that is used, should be the tax rate that the higher income earning spouse, or the one with the bigger pension would have at the time of retirement? the lawyer used 25% on everything, does that seem high? Not sure where that number came from, I assumed it was a standard amount.
Reply With Quote
  #15  
Old 01-22-2018, 10:49 AM
mafia007's Avatar
mafia007 mafia007 is offline
Senior Member
 
Join Date: Nov 2014
Location: Ottawa
Posts: 274
mafia007 is on a distinguished road
Default

I guest it's the other lawyer who use that rate hein? It is surely too high. Unless you are and your ex spouse making over 250K$ a year... which is not the case since the accumulated pension is only 200k$ and yours is lower than 10K$. Mine was evaluated at more than 350K$ for a period of 15 years of marriage and the actuary used a rate of about 18%. My ex is 15%. This is the rate you would be expected to pay at retirement.


I don't think the other party is reasonable in accounting Notional taxes at 25%. Ask them to consent at a rate ranging around 15% - 18%. If they don't, request that they submit the evaluation through an actuary. Too bad for them because this is at their cost. If they don't, file for a procedural motion as this is a disclosure on financial that is required.
Reply With Quote
  #16  
Old 02-20-2018, 09:48 PM
denbigh denbigh is offline
Senior Member
 
Join Date: Jul 2017
Posts: 132
denbigh is on a distinguished road
Default

Quote:
First, the Actuary will determine the Primary Value of the Pension and then the Value for the purposes of family law. The primary value will be higher and that will be the amount stated on that statement. (for example, the value on my statement was 11200$ higher than the value to be divided).
In my case the large pension to be divided is from an old job, therefore the money is just sitting there, and there will be no further money put into the pension. I am wondering how this affects the value of the pension and whether is ti worth getting an actuary or just using the amount on the yearly statement.
Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Sample Separation Agreement - No support - Part1 cigar7 Financial Issues 8 09-30-2016 07:36 AM
Division of Military Pension trimike Financial Issues 2 05-06-2013 01:57 PM
new here...pls be gentle! :) caro46 Introductions 9 08-11-2011 03:49 PM
Division of Pensions ZipZap Financial Issues 2 07-24-2010 03:12 PM
Pension (OMERS) + division + common law Happy Common Law Issues 3 01-21-2008 10:51 PM


All times are GMT -4. The time now is 09:32 PM.