Pension Division After Separation in Alberta

For many separating couples, a pension can be one of the largest assets they own. So what happens to it after separation?

The general rule

Generally, the portion of a pension accumulated during the relationship may form part of the property to be divided under Alberta's Family Property Act. The method of division can depend significantly on the type of pension.

Defined contribution plans

A defined contribution plan generally has an identifiable account balance, which makes valuing the relationship portion more straightforward.

Defined benefit plans

A defined benefit plan, by comparison, promises a future retirement benefit and may require a different valuation and division process. Depending on the plan, division may occur through a lump-sum transfer, a split of future payments when the pension is paid, or an offset against other property.

Timing matters

Amounts accumulated before the relationship or after separation may be treated differently from the portion accrued during the relationship.

Different plans, different rules

• Provincially regulated plans in Alberta are subject to the Employment Pension Plans Act;
• Federal public service and federally regulated plans have their own division legislation;
• Canada Pension Plan credits earned during the relationship can be split through a separate CPP application; and
• Many plans require specific forms, court orders, or agreement wording before they will divide a pension.

Pension division often requires precise drafting. Speak with our team before signing an agreement that deals with a pension.