Teacher Pensions

Teacher pensions are a major asset, and in this video we'll be discussing how they are dealt with in the process of divorce.

Hi, my name is Shilpa Mehta and I am an associate with Feldstein Family Law Group. Today, I will be discussing teacher pensions and how this major asset is dealt with in the process of a divorce.

In our previous blogs we have discussed how married couples must divide or equalize their property and assets at the time of separation. As a side note, the law with respect to property and common law couples, is very different and has been discussed in a few of our various blogs.

The law assumes that each married spouse has contributed equally to the relationship, financially and in other ways. When your marriage ends, typically you and your spouse should split your net family property equally despite who paid for it or whose name the property is in. For teachers, this includes the value of the pension you have accrued during the course of your marriage.

In recent years, Ontario regulated pension plan members can get the value from the pension plan administrator. The plan member or spouse must complete the appropriate forms and the plan administrator (the person in charge of calculating the value) will then provide you with the value of the pension that the teacher earned during the marriage. You will need to apply for the value by filling out a form from the Financial Services Commission of Ontario’s (FSCO) website and they will likely charge a fee for their services.

Once the value of the pension has been computed, the new rules provide the option for divorcing partners to transfer the value of the member spouse’s pension in the form of a lump sum payment. This option was not previously available and is one of the many features of the reformed laws dealing with pensions. Before, a pension could only be shared at the time that the pension was in pay or through the exchange of assets (i.e. you keep the house and I’ll keep the pension).

For teachers, some of the options on how to divide the pension include division of each installment of the Retired Member’s pension:

  1. division of each installment of the lifetime pension
  2. division of each installment of the bridging/supplemental benefit (if any)

Transfer to a Registered Retirement Savings Plan (RRSP), a Registered Retirement Income Fund (RRIF), or cash payment.

As you can tell, for most educators in long term marriages, your pension constitutes a major asset. Therefore, the division of this asset must be considered carefully and to ensure an equitable split, with the assistance of legal counsel.

If you require further information regarding retirement and separation, or simply want to consult with a lawyer regarding retirement planning through a separation, please contact us at (905) 581-7222 to schedule a consultation.

Thank you for taking the time to watch this presentation, and I hope that you have found it helpful. For more information about separation and pensions, please also visit our website.

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