How is My Teacher’s Pension Divided During a Divorce?

Aug 10, 2015
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When couples get divorced, emotions run high. The pair can be so busy being upset that they don’t realize their rights and obligations. They also might not know that one person’s hard earned pension can be divided during the divorce. This includes teachers’ pensions. Read on to learn how your teacher’s pension will be divided during divorce.

Ontario Laws about Pension Division and Divorce

On January 1st, 2012, a new law in Ontario took effect. It changed the way pensions are valued when a couple divorces.

One of the most important things to know about this law is that pension valuations don’t include the value of non-guaranteed increases to pensions. A non-guaranteed ad hoc increase means that a pension might increase on a one time basis, although there’s no promise this will happen. Ad hoc increases can add thousands of dollars to a pension’s value, so by ignoring the possible increases, the pension’s owner will keep more of the pension.

The Pension Valuation Process

The first step in the pension valuation process is getting the value of the pension. Fortunately, that’s a fairly straightforward process.

Ontario teachers’ pension plans are regulated. To find out the pension’s value, the teacher has to request the value from the plan’s administrator.

Next, the plan administrator takes the imputed value, which means that he or she estimates what the pension is worth, and plugs it into a formula. The result is how the pension should be divided.

The Good News for Teachers

If you’re worried about how dividing your pension will affect your retirement plans, don’t be. Pension division is optional.

Instead of dividing the pension, teachers can opt to buy out his or her ex-spouse using other assets, as long as those assets are worth 50% of the pension’s estimated value. The teacher’s pension remains secure, and he or she doesn’t have to drastically alter retirement plans.

Galbraith Family Law: Your Family Law Experts

Are you going through a divorce and have questions about how your pension will be divided? Call Galbraith Family Law today. We have offices in Barrie, Orillia and Newmarket to best serve our clients. Our dedicated team of legal professionals has years of experience in the field of family law, divorce law, and property division.

About Brian Galbraith

Brian Galbraith is the owner and founder of Galbraith Family Law Professional Corporation. Brian is known in the legal community for his commitment to efficiently practicing family law using technology and streamlining the divorce processes.