I have a company pension.
It is a "defined benefit" plan where I put in a certain amount and the company matches that amount.
When I retire, the pension pays out a monthly amount based on what has been accumulated.
On the NFP statement I added the amount that the pension was valued at on our date of Separation.
At that time I was represented and my lawyer said that I was entiteld to also add an amount under the "liability" heading due to the tax implications of this future income.
The amount that I put in there was 30% of the value. Basically I was saying that I would "lose" 30% of the value due to income tax payable on the earned income that will be earned.
Now my EX and I are getting down to the end. Outside mediation and then trial in November if we don't figure this stuff out.
During our last Conference, the EX wanted to know why the value of the pension today was not put in the document. The value has increased by about 40% due to the bounce back in the market and astute investing on my part. Judge told her no way. Valuation based on separation date. The EX also brought up the fact that I had included this liability on the NFP and why was I allowed to do that if I was not going to be "cashing in" the money to equalize.
Now I can't "cash in" this money to satisfy equalization, but I can transfer ownership of a portion of it to satisfy any potential equalization.
The judge, without going into great detail and asking questions about the specifics of the plan, basically agreed with her. If I was not "cashing in the RRSP's within a short period of time" as he put it, then no liability should be recorded. To be clear, I don't have RRSP's. I have mutual funds within the pension plan.
My lawyer at the time was very clear that this was "common practice" within the NFP calculation. I am no longer represented and I am trying to put my thoughts down for mediation, with the eye on building materials for a potential trial.
Does anyone out there have any experience with this type of thing?
How do I determine, as acurately as possible, what my correct tax liability should be? (30%, 25%, 10%)
It is a "defined benefit" plan where I put in a certain amount and the company matches that amount.
When I retire, the pension pays out a monthly amount based on what has been accumulated.
On the NFP statement I added the amount that the pension was valued at on our date of Separation.
At that time I was represented and my lawyer said that I was entiteld to also add an amount under the "liability" heading due to the tax implications of this future income.
The amount that I put in there was 30% of the value. Basically I was saying that I would "lose" 30% of the value due to income tax payable on the earned income that will be earned.
Now my EX and I are getting down to the end. Outside mediation and then trial in November if we don't figure this stuff out.
During our last Conference, the EX wanted to know why the value of the pension today was not put in the document. The value has increased by about 40% due to the bounce back in the market and astute investing on my part. Judge told her no way. Valuation based on separation date. The EX also brought up the fact that I had included this liability on the NFP and why was I allowed to do that if I was not going to be "cashing in" the money to equalize.
Now I can't "cash in" this money to satisfy equalization, but I can transfer ownership of a portion of it to satisfy any potential equalization.
The judge, without going into great detail and asking questions about the specifics of the plan, basically agreed with her. If I was not "cashing in the RRSP's within a short period of time" as he put it, then no liability should be recorded. To be clear, I don't have RRSP's. I have mutual funds within the pension plan.
My lawyer at the time was very clear that this was "common practice" within the NFP calculation. I am no longer represented and I am trying to put my thoughts down for mediation, with the eye on building materials for a potential trial.
Does anyone out there have any experience with this type of thing?
How do I determine, as acurately as possible, what my correct tax liability should be? (30%, 25%, 10%)
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