Division of Pension Benefits—Canadian Armed Forces pensions

This package provides information about the division of pension benefits upon marriage or common-law relationship breakdown in accordance with the provisions set out under the Pension Benefits Division Act (PBDA). This information is specific to the following audiences:

Please note that there are no provisions in the Reserve Force Pension Plan Regulations (RFPPR), Part I.1 of the Canadian Forces Superannuation Act (CFSA), that allow for the division of pension benefits.

This package is intended for contributors under Part I of the Canadian Forces Superannuation Act (CFSA) and their spouses or former spouses/common-law partners. It is for information purposes only. In the event of any discrepancies between the content of this package and the Pension Benefits Division Act (PBDA) and its associated regulations, the latter will prevail.

The PBDA came into force on September 30, 1994 and provides a mechanism for the division of pension benefits upon marriage or common-law relationship breakdown. The eligible applicant has to apply for a division of pension and produce a court order or written agreement providing for a division of pension benefits. Pension benefits can be divided as part of the division of family assets to a maximum of 50% of the value of the pension benefits accumulated during the period of co-habitation.

Note

An application for the division of pension benefits may be submitted even if the court order or written agreement providing for the division of the pension benefits was drawn up before September 30, 1994, the date the PBDA came into effect, provided the plan member had not died prior to September 30, 1992 and the terms of the court order or agreement have not been satisfied by other means.

Division of pension benefits

Explore the following sections to learn more about the division of pension benefits:

Eligibility requirements for eligible applicants

The pension benefits that are to be divided must have accumulated during the period of co-habitation, while married or living together in a common-law relationship. The following individuals may apply for a division of pension benefits:

Process overview

There are four steps in the process related to the division of pension benefits.

Step 1: request for estimate on division of pension benefits

You may request an estimate of the maximum transferable amount allowed for division before making an application. You can request an estimate even if you are not yet separated or divorced. Refer to the Request for estimate section for specific details, including required documents and forms.

Step 2: application for division of pension benefits

The application for division of pension benefits is the process for an eligible applicant to formally request a division of the plan member's pension benefits, accumulated during the period subject to division, as stated in a court order, written agreement or supplementary documentation.

Refer to the Application for division section for specific details, including required documents and forms.

Step 3: division of pension benefits and payment

Once the application is approved, the division payment is transferred into a locked-in registered retirement vehicle chosen by the recipient. In some cases, a portion of the payment may be paid directly to the recipient and taxed at source. Refer to the Division and payment section for specific details.

Step 4: adjustment to the plan member's pension benefits

After the division payment has been transferred to the recipient's locked-in registered retirement vehicle, the plan member's pension benefit is adjusted to reflect the division of pension benefits. We will notify the plan member of the resulting adjustment.

Refer to the Adjustment to the plan member's pension benefits section for specific details.

Process workflow and time frame

Refer to the Process workflow section for specific details in respect of the division of pension benefits and associated time frame.

Request for estimate

An estimate can be requested even if you are not yet separated or divorced.

Normally an estimate can only be provided once within a 12 month period unless:

Estimate

The estimate calculation is based on the value of the plan member's pension benefits accumulated during the period of co-habitation and on the information you provide. The estimated amount can change significantly with fluctuation in interest rate assumptions. Once an estimate is requested, the Government of Canada Pension Centre will prepare and send a PBDA Pension Benefits Report, advising the applicant of the estimated division amount.

Documents and forms for an estimate

Once completed, the respective documents and forms must be forwarded to the Government of Canada Pension Centre. Ensure that the member's name, date of birth, Service Number (SN) or Pension Number are clearly indicated on the form requesting an estimate, otherwise the form will be considered invalid and will be returned to the sender.

Application for division

This section provides you with the details you will need to complete an application for a division of the pension benefits accumulated during the period of co-habitation. It includes the required documents and forms. The spouse or former spouse/partner may make an application for a division as soon as there is a court order or a written agreement providing for the division.

Application

Once there is court order or written agreement for the division of your pension benefits in place, you must submit an application in order for a division to occur as the division is not carried out automatically upon divorce or separation. This can be done at any time. You may also withdraw an application for division at any time until the division payment is transferred to the locked-in registered retirement vehicle. Refer to the Division and payment section for specific details pertaining to the payment process.

Documents and Forms for an Application

Once completed, the respective documents and forms must be forwarded to the Government of Canada Pension Centre. Make sure that the member's name, date of birth, Service Number (SN) or Pension Number is clearly indicated on the application form, otherwise the form will be considered invalid and will be returned to the sender.

Notification and objection

When an application for the division of the pension benefits has been approved, both parties having an interest in the application (from here forward referred to as the applicant and non-applicant) will be notified in writing.

The recipient of the division payment will also be provided with instructions on how to direct the payment into a locked-in registered retirement vehicle once the application is approved. Refer to the Division and Payment section for additional details pertaining to the payment of the amount subject to division and required forms.

The non-applicant has 90 days to file a notice of objection to the division from the date of being notified of the application for division. An objection to the division may be filed in writing to the Government of Canada Pension Centre. If the objection is valid, the application for division is put on hold until the objection is resolved.

There are three grounds for objection:

Documentation in support of the objection must be forwarded to the Government of Canada Pension Centre within the 90 day objection period. Once the objection period has expired and no objection has been received, the division will be processed. Refer to the Division and Payment section for details.

If the non-applicant is able to prove grounds for objection, the application for division will be refused unless or until there is a new court order or written agreement that allows for the division to proceed. The application for division can also be refused, if the Government of Canada Pension Centre cannot determine the period subject to division, as a result of a dispute regarding the dates of co-habitation.

Division and payment

This section provides specific details pertaining to the calculation and payment of the amount resulting from the division of pension benefits.

The plan member's accumulated pension benefits are subject to division before or after retirement. For the member who is in receipt of monthly pension payments, the maximum transferable amount is based on the value of future pension payments only.

Calculation of the division of pension benefits amount

Depending on the terms of the court order or written agreement, the recipient can receive up to 50% of the actuarial present value of the plan member's pension benefits accumulated during the period subject to division. The actuarial present value is a lump sum equivalent to a pension benefit normally payable in the future. If the court order or written agreement provides for the transfer of a smaller lump sum amount, this smaller amount will apply.

Payment of the pension benefits division amount

Locked-in provisions

The division payment is transferred as a lump sum directly to a locked-in registered retirement vehicle chosen by the recipient. The recipient can also choose to have the funds transferred to a life income fund, to another registered pension plan or to a financial institution or life insurance company for the purchase of an immediate or deferred life annuity. The division payment can be transferred into several accounts, as long as they are locked-in registered retirement vehicles. Recipients are responsible for consulting with their chosen institution as to their financial options.

Required forms
Tax implications

As the division payment is transferred into a locked-in registered retirement vehicle, taxes do not apply until the recipient starts receiving periodic benefits from the chosen financial institution. However, if any portion of the division payment exceeds the limits allowed under the Income Tax Act, it is paid directly to the recipient and income tax is withheld at source. For additional details on income tax, we invite you to consult the Canada Revenue Agency Website.

Adjustment to the plan member's pension benefits

When the division payment is transferred to the recipient's locked-in registered retirement vehicle, the plan member's pension benefits will be adjusted and the Government of Canada Pension Centre will notify the member accordingly.

For plan members in receipt of ongoing pension benefits, the adjustment will take effect the first of the month following the division.

If the plan member has less than 20 years of service, and is in receipt of an immediate annuity on account of being disabled on release, the reduction starts on the first day of the month following the member's 60th birthday.

Process workflow

This section provides specific details in respect to the division of pension benefits process workflow and associated time frame.

While we intend to process requests within the specified time frame, in some cases, the process may be delayed for reasons beyond our control. Some possible reasons for delays are:

Timeline

Please note that if the non-applicant submits an objection, a letter will be sent to the applicant advising them of this within 15 days from the date of receipt of the objection to the division.

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