Pensions are family property, with their own rules
Under the Family Law Act, a spouse’s entitlement under a pension plan, a retirement savings plan, an annuity or an income plan is family property, and the starting point is that each spouse is entitled to half. But a pension is not valued and split like a bank account. Part 6 of the Act sets out how the share is calculated and how it is paid, and it applies unless the spouses’ agreement or a court order provides otherwise. One consequence: the general rule that family property is valued at the date of the agreement or the hearing does not apply to a division under Part 6.
The share is based on the part of the pension earned during the relationship. For a defined benefit plan, where the pension is set by a formula of salary and years of service, the regulation sets the spouse’s proportionate share at one half of the pensionable service built up between the start of the relationship and separation, divided by the member’s total pensionable service. For a defined contribution plan, the spouse’s share is one half of the account balance at separation, less what was in the account when the relationship began, with investment returns on each.
Dates that change the numbers
Two dates drive a pension division: the date the relationship began and the date the spouses separated. Under the Act a relationship begins on the earlier of the date the couple started living together in a marriage-like relationship and the date they married, so years of living together before a wedding can count. Separation can happen while spouses still live under the same roof, and the court can look at what each said and did to decide when it occurred. Because the formula compares service earned between those two dates with the member’s total service, an argument about either date can move the share. The agreement or order should state both dates expressly, so that the plan administrator does not have to guess.
How the share is actually paid
What happens next depends on the type of plan and whether the pension has started.
| Situation | How the spouse’s share is satisfied |
|---|
| Defined contribution plan | The spouse’s share is transferred out of the plan to the spouse’s credit or, if the administrator agrees, kept in the plan in the spouse’s name |
| Defined benefit plan, pension not yet started | The spouse becomes a “limited member” of the plan and can take a separate pension, or a transfer of the commuted value if the plan allows members to transfer out, but not before the earliest date the member could have started their own pension |
| Pension already being paid | The spouse receives a proportionate share of each payment for the member’s lifetime, until the spouse dies or the benefits end |
| Locked-in retirement account or life income fund | The spouse’s share is transferred from the account |
| Plan regulated outside BC, for example a federally regulated employer’s plan | Divided by the method that plan’s own legislation provides, with the BC court able to step in if that method would be unfair |
To start the division, the spouse gives notice to the plan administrator in the prescribed form, and the administrator must have a copy of the agreement or order before it divides anything. A spouse who has given notice can ask the administrator for the prescribed information about the plan, and again each year; the administrator cannot otherwise disclose the member’s information without the member’s written consent. Getting that statement early is the simplest way to put a value on the pension before negotiating about the house.
Trading the pension against the house
Couples who want to keep the pension intact can agree that the member keeps all of it and compensates the other spouse in another way, for example with a larger share of the equity in the home. The Act allows this. Compensation for a pension interest is worked out under the regulation unless the agreement or order sets its own method, so the figure has to be calculated, not estimated from the plan statement. Two cautions:
- A dollar of pension and a dollar of home equity are not the same thing. One is paid in future, the other is available now. The calculation should account for the difference, and both spouses should have advice before trading one for the other.
- An agreement that is meant to be a final settlement but says nothing about pensions is treated as allocating all of the member’s benefits to the member. If you are the non-member spouse and you have not dealt with the pension expressly, you may have given it up.
Keeping or selling the home
The house is valued at fair market value as of the date of the agreement or the court hearing, not the date of separation, so a change in the market between those dates affects both spouses. If neither spouse can buy the other out, the house is sold and the proceeds divided after the mortgage and costs. If one spouse wants to keep it, a buy-out is negotiated, and the pension or other assets can be used to balance the numbers as described above. Where the spouses cannot agree, the Supreme Court can declare ownership, order one spouse to transfer title, order compensation or order the property sold and the proceeds paid out in set proportions.
Before the property is divided, either spouse can ask the Supreme Court for an order giving them exclusive occupation of the family residence for a set period, and the court can stop the other spouse from disposing of property at issue. See our property division page and the article on whether family property is divided equally after separation.
Children
If you have children together, every decision about them turns on their best interests and nothing else, and the amount of child support comes from the tables in the Federal Child Support Guidelines. See our pages on child support and co-parenting responsibilities.
Which court, and the deadlines
Only the Supreme Court can divide a pension, and the same court deals with the house and grants divorces. Its Vancouver registry is in the Law Courts on Smithe Street, roughly 7 km by road from the West Point Grey Community Centre. If the only issues are the children and child support, the Provincial Court is also available; by straight-line distance, Robson Square is far closer to West Point Grey than the Richmond courthouse, so it may be the registry the rules point to, but confirm with the registry before you file.
The time limit applies to pensions just as it does to the house. Married spouses must bring a pension, property or spousal support claim within two years of the divorce judgment; for unmarried spouses the two years start at separation. Once the divorce is granted the clock is running, which is a reason to settle the pension before or together with the divorce. To obtain a divorce, the spouses must have been apart for a year, unless adultery or cruelty is proved, and one of them must have been habitually resident in BC for the year before the case begins. See how long after separation you can claim assets and the divorce page.
What to bring to a first meeting
- The name of each pension plan either of you belongs to, and the most recent annual statements.
- Any statement showing pensionable service, or the plan booklet if you have it.
- The date you started living together, the date of any marriage, and the date you consider you separated.
- Statements for RRSPs, locked-in accounts and any annuity.
- The mortgage statement and title details for the home, and any recent appraisal.
- Any agreement you have already signed, including a marriage or cohabitation agreement.
With those documents, a lawyer can tell you how the pension is likely to be divided and what trading it against the house would mean in numbers.
Our family lawyers
Judith A. Janzen, a principal of the firm since she and Candace Cho, KC joined forces in 2012, leads the family group. The family lawyers include Rupinder Shoker, Mason Heller, Shivleen Sidhu, Rasjovan Dale, Susan Kim, Louisa Ledesma and Katya Richardson; the last three also practise estate litigation. See the team page for each lawyer’s background.
Separation also changes an estate plan. For a new will or power of attorney, see our West Point Grey estate lawyers.
Common questions
My spouse has a defined benefit pension through work. Am I entitled to half of it?
To half of the part earned during your relationship, not half of the whole pension. The share is calculated by a formula based on pensionable service during the relationship, unless your agreement or a court order sets a different method.
Can I keep the house if my spouse keeps the pension?
Yes, if you both agree or the court orders it, but the pension interest has to be valued properly before it is traded against home equity. A pension paid in future is not worth the same as equity available today.
Our separation agreement does not mention pensions. What happens?
If the agreement is a final settlement and is silent on pensions, the law treats the member as keeping all of their pension benefits. Take advice before signing anything that does not deal with pensions expressly.
Is there a deadline?
Yes. Married spouses have two years from the divorce order to claim a share of a pension or other property; unmarried spouses have two years from separation.
How do you charge?
By the hour for family files. Ask about the first consultation when you phone (604) 900-2538.
