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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 01-26-2009, 06:15 PM
WWM WWM is offline
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Default Pension transfer settlement

How do you go about transferring pension funds to pay a divorce settlement, do you transfer from His RRSP to her RRSP, and can she collect the money without retirement to pay debt? The issue is, paying off her debts ($17,000+) from her marriage seperation, using an RRSP amount transferred to her as a settlement. She was told to fill out a T2220 form, by her lawyer, to complete the transfer from his RRSP to her RRSP, so she can get the money to pay the debts. Is this correct, or is there another way for her to get the money for paying her debts, using his pension? The whole thing is confusing, told one thing by lawyers, and another by the government office. Now it was mentioned he was using a "locked-in" RRSP from work, to do the transfer. Should he be using another form ( Form 6.1 ) to transfer money to her from that RRSP. See the confusion....told different things and read different things......can anyone clarify what is supposed to be done, before bankruptcy has to be claimed! Hope you get what I am asking!
Old 01-26-2009, 09:10 PM
yearsgone yearsgone is offline
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My Lawyer sent me to a financial adviser about this . She said that I would get half of his work pension, but since it was a "locked in" RRSP , then I had to re-invest it as the same - locked in. I was in a bad way financially but I still couldn't touch the money. Instead I get a dividend each year.
Also she should know that if you cash in an RRSP, it is taxable and the taxes are removed before you get the balance of the money.
Old 01-26-2009, 09:55 PM
FreeNow FreeNow is offline
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Pensions are handled differently (with divorce) from province to province. In Ontario a value is placed on the pensions and that value is included in the NFPs of both parties.
In some other provinces the actual payouts of the pensions are equalized in a similar method to CPP splitting.
At the time of divorce the federal government allows a one time transfer of funds from one spouse's RRSP to another for equalization. If this is done the tax rate that each spouse would be paying on withdrawal should be considered.
I believe an employers RRSP plan would include a variety of RRSP investments. The longest any of them would be locked in for would be 5 years. That would not prevent them from being transferred. If it were a registered pension plan that would be a different matter. That would be locked in after it is vested.

Old 01-27-2009, 12:29 AM
WWM WWM is offline
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Taxes were considered, and added to the settlement for a higher total, so as not to lose what she wanted. As far as she knows, and told, she was to be able to cash it in, but doesn,t seem to be the case. The transfer is supposed to be from a locked-in RRSP from his work plan, and she is told it will go into a locked-in plan, and can't touch it until she retires, or I guess at age 55. It seems she spent money to a lawyer to get her the money, and the lawyer didn't do it. Seems like the other lawyer pulled a fast one, and her lawyer was ignorant of facts. Don't know what happened, but bankruptcy seems to be the answer unless there is something else we don't know of yet. So I hope someone else can help! Thanks for the help, everything counts!
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