Does my spouse have a right to my pension?

Gary Bhattal, Calgary Family Lawyer

Across provinces, Canadian family law legislation interprets “property” to include real and personal property, including all interests in that property, contingent or vested.

Pensions?

They are family property, too.

Canadian Family Law has progressed since the days of Currie v. Currie (1981), when a Nova Scotia court objected to the inclusion of pension rights in matrimonial property. The introduction of the 1978 Matrimonial Property Act in Alberta entitled the Courts to make a distribution of the pension and benefits between the Plaintiff and Defendant, notwithstanding that a party may not have a legal or equitable interest in that property (Olsen v Olsen 1996). Four years after the Act’s introduction, the landmark case of McAlister v McAlister (1982) created a formula for pensions to be valued and assessed prior to being distributed to the opposing party. In the case, it was presumed the husband would continue to contribute to his pension after the date of separation, and he was instructed to hold in trust the wife’s interest in the pension plan. Furthermore, he was directed to name the wife as sole beneficiary on his pension plan and was enjoined from changing the designation without leave of the Court. This formula has subsequently been applied in family law cases throughout Canada.

How is the pension divided?

There are a number of ways, as indicated by the Supreme Court of Canada in Clarke v Clarke, 1990 CanLII 86 (SCC):

[93] Courts, generally speaking, employ two methods of dividing pensions. The first is to award lump sum compensation to the non-recipient spouse either by way of a money payment or a transfer of assets. The second is to preserve the jurisdiction of the court until the pension matures, either by ordering periodic payments to be made to the non-recipient spouse or impressing the pension with a trust. When selecting the appropriate method of distribution, it is important to bear in mind that the primary goal of the legislation is to effect the adjustment of property in an equitable manner. Of equal importance in some cases is the desire to sever the financial ties between the parties. These two goals may occasionally come into conflict. A fair distribution in some cases may require the parties to wait until the pension matures before it is subject to division. This will necessitate a continuing financial association between the parties. Capitalizing the pension for an immediate accounting may succeed in severing the financial ties between the parties but result in hardship to one of them if, for example, there are no other substantial assets to be divided. The preferable result in any given case will obviously depend upon a number of factors …

Under current legislation, family property, including pension, is valued at the date of the trial, however exceptions can be made when applying S.8 of the legislation. In the case of Shopik v Shopik, Justice Yamauchi awarded the spouse one half of her husband’s pension during the time of joint accrual. Any accrual to which the husband contributed beyond the date of divorce was not divided in the wife’s favor. In this case the joint accrual period was ruled as the date the parties got married, to and including the date of their separation.

Do you have questions regarding a spouse’s right to your pension? Call the family lawyers at Crossroads Law today to get answers to all your family property questions.