Marriage Break-up
All divorces, legal separations and written agreements involving the splitting of family assets of a marriage or common-law relationship are subject to a 50/50 split of pension credits accumulated by one or both spouses.

For employees at the University of Manitoba who have had a marriage/common-law relationship breakup as defined above, the Employee Account, the University Account and the Additional Voluntary Account, if any, are subject to sharing. Once you notify the Staff Benefits Office we will write to both you and your spouse/common-law partner advising of the pension credits that are subject to sharing. Only the pension credits accumulated during the period of marriage/common-law relationship are subject to the legislation.

Common-law Relationship

The Pension Benefits (Act) now also recognizes the common-law relationship of a person who, with the member or former member, has registered a common-law relationship under The Vital Statistics Act, subject to the requirements of the Income Tax Act (Canada).

Common-law relationship means the relationship between two persons who are common-law partners of each other.

The Act now defines "common-law partner" of a member or former member as:

a.
a person who, with the member or former member, registered a common-law relationship under section 13.1 of The Vital Statistics Act, or
b.
a person who, not being married to the member or former member, cohabited with him or her in a conjugal relationship.
 
 
1.
for a period of at least three years, if either of them is married,
 
2.
or for a period of at least one year, if neither of them is married.

 

Division of Pension Benefits on Break-up

Pension benefit credits or payments due, are subject to an equal division under The Pension Benefits Act where either:

  • an order of the Court of Queen's Bench made under The Family Property Act (formerly The Marital Property Act) exists requiring that family assets of the spouses or common-law partners are to be divided; or
  • a written agreement between spouses or partners exists dividing family assets of the spouses or common-law partners between them.

For purposes of clause (a) it should be noted that only:

  • married spouses;
  • parties to a registered common-law relationship; or
  • parties to non registered common-law relationship who have cohabited in a conjugal relationship for a period of at least three years

can obtain an order to divide family property under The Family Property Act. Otherwise, benefits and payments are divisible on the existence of a written agreement dividing family property.

Common-law partners are no longer required to file written declarations regarding the existence and termination of a common-law relationship in order that pension benefits be subjected to an equal division under the Act, as subsections 31(5) and 31(7) of the Act have been repealed.

The pension benefit credits or payments due that are subject to an equal division are those that accrued:

  • in the case of a common-law relationship, from the first day of the period in which the parties cohabited with each other in a conjugal relationship and which continued until they became common-law partners, or
  • in the case of marriage, from the date of marriage or, if there was a period in which the parties cohabited with each other in a conjugal relationship and which continued until they were married, from the first day of that period,
  • until the date that the parties began living separate and apart.

For spouses who began living separate and apart before June 30, 2004, the pension benefit credit or payments due subject to division are those from the date of marriage.

Parties can waive the mandatory splitting in accordance with the requirements of section 31(6) of the Act where they have:

  • received independent legal advice;
  • received a statement from the pension plan administrator indicating the pension benefit credit or payments due, as the case may be, to which each spouse or common-law partner would be entitled if the division was to take place; and
  • entered into a written agreement to the effect that the pension credits would not be divided between them, and the agreement must be in accordance with the Pension Benefits Act Regulation.

For additional information on The Common-Law Partners' Property and Related Amendments Act, please visit the website at:

http://web2.gov.mb.ca/laws/statutes/2002/c04802e.php

 

 

Opting Out of the 50/50 Credit Split

If both parties agree, mandatory splitting of pension credits need not occur. An agreement not to divide the pension or pension benefit credit must acknowledge that each of the parties:

  1. is entering into the agreement voluntarily and without duress, coercion or compulsion of any kind; 
  2. has received independent legal advice with respect to the effect of the agreement; and 
  3. has received a statement from the administrator of the pension plan, in accordance with section 11.11 (statement for division of pension).

Who can use the opt out provision?

The opt out provision is available to spouses/common-law partners who separated on or after June 24, 1992, or to those who had separated earlier, but had not finalized the division of pension credits or payments.

What if only one of the two parties wants to opt out?

Where spousal mutual agreement cannot be obtained, mandatory splitting of pension benefits must be applied (50/50).

 

Splitting the Difference

If both parties are members of a registered pension plan they can agree in writing to divide equally, the difference in values of the two pensions, rather than dividing both pensions on a 50/50 basis.

Example: transfer one-half of the net difference in the two benefits, or in this case:

Pension Credits Earned during the period of marriage:
Mrs. X:
$70,000
Mr. X:
$40,000
Division of Net Difference:
($70,000 - $40,000)/2 = $15,000*
Mrs. X = $70,000 - $15,000 = $55,000
Mr. X = $40,000 + $15,000 = $55,000

*This amount is transferred from Mrs. X's plan to Mr. X's plan, thereby equalizing the pension benefit credits earned during the marriage.

 

 

 

Other Benefits

If you are separated or divorced, your spouse/common-law partner is not eligible for health and dental benefits. You may continue to list your former spouse/common-law partner as a beneficiary under your life insurance plan. You may also continue to list your former spouse/common-law partner as beneficiary under the pension plan provided you do not have a new legal or common-law partner.

 

 

   


 

 

 
Questions or comments regarding Pension Benefits 
please e-mail: Pension Administration