Gail Vaz-Oxlade's Guide To:

Pension Valuations

Financially Smart Divorce


For more than 25 years you have witnessed Gail Vaz-Oxlade's trademark straight-up money wisdom, both on Radio and Television, most notably as host of TVs Till Debt Do Us Part, Princess and Money Moron. Gail is a best-selling Canadian financial author.

Gail Vaz-Oxlade's Guide To

Pension Valuations

Financially Smart Divorce

Pension Valuation ONTARIO

Are Pensions Included In A Divorce?

When you divorce in Ontario and negotiating your separation agreement, every asset and possession that has increased in value during the marriage is going to be jointly divided. This includes all pensions. The law in Ontario is very clear that each spouse is automatically entitled to a share of the other spouse’s pension.

How Do I Calculate Pension Valuation For Divorce?

A work pension does not belong to one spouse or the other. It is considered a matrimonial asset.  The Pension valuation will be a part of the divorce negotiations for fair and equitable distribution. It is therefore part of the division of assets that will be included in your Separation Agreement.

One of the biggest mistakes people make is to assume that they know the value of a pension based on a Pension Statement. There is a huge difference between a ‘Pension Statement’ and a ‘Pension Valuation.’

A regular annual pension statement does not include the pension valuation as an asset for the purposes of family law. The difference between a Pension statement and a Pension valuation can often range from $50,000 to $200,000.

You should never make decisions about pensions without first receiving professional financial and legal advice.The value of the part of the pension plan accrued during the marriage is frequently the largest single asset. However, there are many ways to calculate this value. 

Pension Splitting: How Do I Divide Canada Pension Plan (“CPP”)

Couples getting divorced can apply to the government to divide their CPP contributions that they made during the time they lived together. This process is known as credit-splitting. CPP credits can be divided even if one spouse did not make any contributions to CPP.

You are eligible to apply for credit-splitting if you lived together for at least one year while married, and you have now been living apart for at least one year. Credit-splitting will not happen automatically, you will need to notify the government and complete the required forms.

Gail Vaz-Oxlade and Pension Valuations and Divorce

Pension Valuations and Divorce In Ontario

“How you negotiate the terms of pensions will have tax implications and notable ramifications on your personal retirement planning.

Whether you choose mediation, a collaborative process, or the lawyer-led negotiations,  you will be helped to understand whether you are entitled to a portion of your spouse’s pension, determine the exact amount that you may be entitled to receive and how to best to apportion pensions.”

Family Mediation in selwyn Ontario

How to Avoid A Messy Divorce

  1. Seriously consider mediation before lawyer litigation
  2. If at all possible, stay out of the Family Courts
  3. Gather and organize your financial documents
  4. Do your homework, understand how divorce works in Ontario
Family Mediation in selwyn Ontario

How to Avoid A Messy Divorce

  1. Seriously consider mediation before lawyer litigation
  2. If at all possible, stay out of the Family Courts
  3. Gather and organize your financial documents
  4. Do your homework, understand how divorce works in Ontario

Pension Splitting: Private Pensions and Workplace Pensions

A private work pension does not belong to one spouse or the other. It is considered a matrimonial asset that must go into the divorce negotiations for fair and equitable distribution. It is therefore part of the division of assets that will be included in your Separation Agreement.

One of the biggest mistakes people make is to assume that they know the value of a pension based on a Pension Statement. There is a huge difference between a ‘Pension Statement’ and a ‘Pension Valuation.’

Why DO I Need To Value My Pension?

A regular annual pension statement does not include the valuation of a pension as an asset for the purposes of family law. You should never make decisions about pensions without first receiving professional financial and legal advice.

A pension will likely be your most valuable asset next to the matrimonial home, and in some cases will be worth even more. Without knowing its true value, you will unable to complete your divorce negotiations in a fair and equitable manner.

Many people make the mistake of saying “You keep your pension, and I’ll keep mine.” Since there can be a huge discrepancy in the value of the pensions, this leaves one of the spouses in a financial position that is far worse off.

You can determine the value of your private workplace pension by applying to the pension Plan Administrator. The Plan Administrator will calculate the value of your pension by following the guidelines set out by the government, eliminating any questions or disparity about the method of valuation.

What is the Difference Between a Defined Contribution vs. Defined Benefit Pension?

A defined contribution pension plan is a retirement plan where funds are regularly contributed by the employee, employer, or both and are invested on behalf of the employee. On retirement, the employee receives the total of the contributions accumulated and the investment income earned.

The family value of the defined contribution pension plan is the total amount that has been contributed up to the date of separation. A savvy individual would contact a financial professional to help them determine the exact amount in the pension as of the date of marriage and date of separation, in order to determine the increase in the value of the asset over the course of the marriage and how to strategically divide that value.

Typically, a financial professional will be able to assist the spouses in transferring a portion of the pension without incurring any additional tax consequences.

A defined benefit pension plan is one where the employer guarantees that the employer will receive a specified amount on retirement. This amount typically depends on the employer’s income level, years of service, and age, rather than depending directly on investment returns.

Family Mediation in Smooth Rock Ontario

The Unofficial Rules of Divorce:

  1. Divorce gets prickly, even in the most amicable situation
  2. It’s often less about the legalities and more about the money
  3. People make expensive mistakes because they don’t make a plan
  4. Before you do anything, understand your rights, obligations & complexities
Family Mediation in Smooth Rock Ontario

The Unofficial Rules of Divorce:

  1. Divorce gets prickly, even in the most amicable situation
  2. It’s often less about the legalities and more about the money
  3. People make expensive mistakes because they don’t make a plan
  4. Before you do anything, understand your rights, obligations & complexities

Can I Do A Pension Valuation Myself?

It is very difficult to determine the present day value of the pension as of the date of separation and date of marriage. You will need to speak with a financial professional and the plan administrator to have the pension properly valued for family law purposes.

As the value of both pension plans will be dependent on the date of marriage and date of separation, it is critical to discuss the pensions as part of the separation agreement negotiations. In creating your separation agreement, you and your spouse will come to an agreement on the date of separation, which will inform these values.

How Do I Divide a Private Pension?

Government regulations allow for a divorcing couple to apply for an immediate transfer of a lump sum from the plan if all of the following conditions are met:

  • They are separated with no reasonable chance for reconciliation
  • No amount of the pension has been paid out
  • The couple has obtained the family law value of the pension from the Plan Administrator
  • The division of the pension is part of a Separation Agreement
  • The exact amount to transfer has been specified

What are Options for Dividing a Pension at Divorce?

When the spouses decide to split some portion of the pension, you typically have the option of moving the funds to another pension account in Canada (if allowed by that pension’s Administrator), transferring the value to a locked-in retirement account, or leaving it in the plan for their future benefit (if the Administrator allows).

In cases where the pension is currently being paid to one of the spouses on retirement, the other spouse can also apply for an immediate transfer of a lump sum.

How you negotiate the terms of pensions will have tax implications and notable ramifications on your personal retirement planning.

Do I Have to Split my Pension When I Divorce?

Whether you choose mediation, a collaborative process, or the lawyer-led negotiations, you will be helped to understand whether you are entitled to a portion of your spouse’s pension, determine the exact amount that you may be entitled to receive, and how to best to apportion pensions.”

Remember, you don’t necessarily have to even split the pension, it is only the value of the pension that matters for the purpose of division of assets. It is perfectly reasonable for one spouse to keep the entire pension and the other to receive appropriate value for it.

Keep in mind, the way pensions are paid out can affect retirement income and the relative financial position of each spouse.

Wisdom dictates that you make a financial advisor or Certified Divorce Financial Analyst part of your divorce negotiations to ensure that you and your spouse reach a mutually beneficial agreement that places your entire family in the best possible shape moving forward.

Are You Entitled To Share The Matrimonial Home?

Learn more about how the matrimonial home is dealt with in Ontario Separation Agreements. 

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Gail Vaz-Oxlade's Guide To Pension Valuations

For more than 20 years you have witnessed Gail Vaz-Oxlade’s trademark straight-up money wisdom, both on Radio and Television, most notably as host of TVs Till Debt Do Us Part, Princess and Money Moron. Gail is a multiple time, best-selling financial author, and one of the top Canadian authors of the past decade. Gail brings her common sense wisdom to answer your questions about Pension valuations and divorce in Ontario.

Gail Vaz-Oxlade is Canada’s no-nonsense, money expert.
Gail Vaz-Oxlade Divorce and Finances