ANSWERS: 2
  • For private pension plans, this issue is dependent on what was included in any separation agreement or divorce orders that stemmed from his relationship with his ex-wife. Pension issues should to be settled during the divorce process, because substantial amounts of money can be involved. If overlooked, it could present a problem in the future. Pensions are usually settled based on the situation at the time a couple were deemed to have begun their separation. If an individual's pension is not vested (i.e., if the individual terminated their employment on the date of separation, his or her contributions to the pension plan would be returned to them), the value of the pension at the time of separation is divided 50-50. If the pension was vested (i.e., the individual could not withdraw his or her contributions to the pension plan, forcing them to remain within the plan or transfer their assets to another vested plan), the value of the pension acquired during the marriage or common-law relationship as of the date that it would begin to be paid out would be split 50-50. In other words, if he had contributed to a pension plan for 15 years, for example, while married to his ex-wife, she would be entitled to half the value of the pension built up over that 15 year period. Normally in these cases, the value of the vested pension at retirement is estimated and is divided using one of two methods. The pension can be divided and paid for immediately. For example, if the pension was estimated to be worth $600,000, this value would be divided equally and the person holding the pension would be required to pay $300,000 to the other party. If the pension is not divided immediately, a portion of the pension will be paid to the ex-spouse after the pension holder retires. Since your husband was married for 21 years, it is almost certain that any pension rights he holds would have been vested at the time of his divorce. If the pension was not bought out at that time, his ex-wife is entitled to a share in the pension. If for example, he contributed to the pension for 20 years while married to his ex-wife and 10 years, while married to you, his ex-wife would be entitled to a 50% share of 2/3 of the pension income (e.g., 20 years out of 30, split equally). She would then be entitled to a 1/3 share in any pension payments. It is absolutely essential to have this issue resolved before your husband retires. In the case of a public pension plan, I am only aware of the situation in Canada. An individual is not permitted to exclude any current or former partners from their share of the Canada Pension Plan (CPP). Individuals who separate before the pension is drawn settle the pension division by agreement or court order. An individual cannot exclude his or her current spouse from any pension payments if the spouse has made no contributions to CPP (e.g., a stay-at-home mother who did not work outside the home). A division occurs at the time the pension application is made. For example, my father's pension was split at the source between both my mother and father. His pension payments were divided paid to each other separately. Although they were not divorced and had not been married previously, this mechanism is in place to prevent individuals from denying a share in their pension to their partner.
  • 1. It depends on what their divorce settlement says. 2. It depends on who is listed as beneficiary.

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