Pensions and marital breakdowns: information for lawyers
Lawyers are often asked to advise clients about dividing a pension benefit between a plan member and a former spouse. Learn more about the information and documents we need to administer a pension following a relationship breakdown.
Draft and submit a separation agreement for pension division
Part 6 of the Family Law Act (FLA) states that an administrator can only administer the division of a member’s pension benefit if the administrator has received a copy of a complete, signed separation agreement or registered court order that clearly describes how to divide the pension benefit between the member and the former spouse. If the information provided in the agreement or court order is not clear, there may be delays in processing the pension benefits.
You’ll need to know the following when drafting a separation agreement to divide a pension:
- Whether your client is an active, inactive or retired plan member.
- The correct name of the pension plan (or plans) to be divided between the plan member and their former spouse. Some plan members may contribute to multiple plans, and it is important that all plans be identified. All pension plans that are being divided need to be listed in the separation agreement or court order.
- The start and end dates (day, month and year) of the entitlement period. FLA normally considers this to be from the time the plan member and the spouse married or started living together until the date they separated.
- The proportionate share of the pension that is payable to the former spouse. FLA's standard formula for calculating the proportionate share is one-half of the pensionable service earned by the member during the entitlement period, divided by the total pensionable service earned by the member. The proportionate share can be different from the legislative standard; however, if a different proportionate share has been agreed upon, it must be expressed as a percentage. The plan cannot divide a pension based on a set dollar amount.
- Any other special provisions for dividing the pension that vary from those under FLA, such as whether the division will include any pension service purchased after the entitlement date or whether disability benefits should be divided. If the separation agreement or court order does not address disability benefits, they are deemed to belong to the member.
We can review draft separation agreements and court orders from a pension administrator perspective. We can only inform you if the pension division can be administered as described in the document or if any information is missing or requiring clarification. We cannot provide advice on the substantive content of the separation agreement or court order itself.
Once you have finalized the separation agreement or court order, submit a complete copy of the document to BC's Public Service Pension Plan.
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