Division of Defined Pension Plan

[ann morcombe]

I live in Ontario and have been married for 25 years. Both my spouse and are 50 years old. My spouse hasn't worked for the past 19 years. She contributed to a teacher's pension for 6 years prior to having children. I have 2 defined pension plans. The one plan is from a company that I worked for 10 years. The other is for the company that I am currently working for. How are pensions divided upon separation? I thought that it was through an equalization payment. However, I read that this was being changed via Bill 133. Has this Bill been enacted?

I received notifcation from my previous employer that I could transfer the value of my pension into a locked in RRSP. Would this advisable or should I leave it in the plan and draw on it when I am 60?

[dinkyface]

Defined Benefits or Defined Contribution?

[ann morcombe]

Both are Defined Contribution plans.

[logicalvelocity]

Useful reading.

Legislative Assembly of Ontario | Bills & Lawmaking | Current Parliament | Bill 133, Family Statute Law Amendment Act, 2009

[ann morcombe]

Any recent personal input as to how their Defined Benefit pension was divided would be greatly appreciated!

[toughingitout]

Hi there,
I am in a similar situation it seems..my spouse has only begun working as a teacher (which is a great pension I am told) for the last 5 years after a career change that I funded. I have been a part of OMERS, a defined benefit plan, all my working life, 22 years. Both OMERS and the teacher pension plan are considered extemely good plans. I am not sure as I am awaiting an actuarial value, but my ex's plan was valued at about 40K to 60 K for the years of marriage based on an actuarian's result. I expect that mine will be significantly more due to the number of years I have contributed. The values will be compared and used for equalization, unless I can get him to trade off on other assets.
This whole process is very distasteful to me due to the fact that, by the time we each retire, his pension plan is expected to exceed mine in payout of a retirement income, and yet I'll still owe wads of money when the "during marriage" values are compared.

[dadtotheend]

You should start another thread to deal with your question.

You should also use other assets to trade off the equalization.

It might be distasteful to you, but that's only because your swallowing the wrong way.

How long were you together?

[toughingitout]

Yes,

you're absolutely right about why it's distasteful to me, and I probably wouldn't feel this way if it was working for me.
However ,the fact that I have to sacrifice my pension when my earning prospects are much lower is still a hard thing to swallow. As the pensions are based on the best 5 years of earnings, at this point, it looks like his pension will be based on a higher salary so does that make it worth more?
We were married for 19. 5 years.
I earn $63 K whereas my ex earns about $93K as a teacher. We separated shortly after he reached the top salary tier and he managed this on a short stint as a teacher by some form of credit for prior work experience and lots of extra qualification courses.

[dadtotheend]

you're absolutely right about why it's distasteful to me, and I probably wouldn't feel this way if it was working for me.

Are you saying that you feel that way purely because you owe and if he owed you, you wouldn't feel that way?

I just don't understand some people. There is no merit in what you are saying and moreover, why you are saying it.

YOU MADE A LIFELONG COMMITMENT TO HIM WHEN YOU MARRIED HIM!!!

That includes sharing things while you are together. That includes your finances, and specifically your pension.

If you're that concerned about money, you only have yourself to blame for not doing the financial due diligence before and during your marriage.

Some folks just don't get it.

[Mess]

Stop thinking about it as a pension and think about it as an asset. You two are going to look at the net assets that you both accumulated during the marriage and split the difference. That is all. If you choose you may keep your pension intact and take the difference out of some other asset.