Ending a Relationship
Do you understand how a divorce, separation, or break up affects your pension? Read on for more details.
Break ups, separations, and divorces can be a challenging time in life, but what some people don’t realize is that it can affect your pension.
If you’re ending a spousal or partner relationship (otherwise known as relationship breakdown) and you plan to divide your pension, you will need a division order. ATRF administers these in accordance with legislation depending upon the time the relationship broke down and the order was granted.
- Matrimonial Property Orders (MPOs) are orders granted up to December 31, 2019.
- Family Property Orders (FPOs) are orders granted on or after January 1, 2020.
The Matrimonial Property Act restricted the division of pensions when a relationship ended to members who were legally married and had since separated or divorced. Individuals who were in a common-law relationship were not able to obtain an MPO. Therefore, ATRF could not divide a member’s entitlement to benefits at source under the Alberta Teachers’ Pension Plans.
Effective January 1, 2020, the Matrimonial Property Act changed to the Family Property Act. Common-law couples who meet the plans’ definition of pension partner, and separated on or after January 1, 2020, are now able to obtain an FPO and divide a member’s entitlements under the plans. There has been no change to married members’ access to FPOs or the options available to them.
Family Property Orders (FPO)
There are some prerequisites before ATRF can divide a pension entitlement in relation to a Family Property Order (FPO):
- The FPO must be in accordance with the Family Property Act.
- The FPO must provide for a lump-sum payment division unless the pension is already in pay.
- Only benefit entitlements earned during the period of joint accrual can be divided. The period of joint accrual is generally the period during which the parties were married or in a common-law relationship and while the member was a participant of the plans.
- ATRF will require a court-filed and court-certified copy of an FPO.
The form of FPO that is required to divide a pension depends on whether the member was vested and has sufficient pensionable service to be eligible for a pension from the plans. To request a valuation of the benefit entitlement and to confirm the member’s status in the plans, complete and return the Request for Statement of Benefit Entitlement form. Please note that if the incorrect form of FPO is obtained, ATRF may not be able to administer the division. ATRF will work with members to ensure the correct form of FPO is obtained and can provide input into whether a draft order is available prior to attendance at court.
More details can be found at the bottom of the page (in the resources section) in the two Division of Pension on Relationship Breakdown Infosheets.
Draft Family Property Orders
Below are various blank Family Property Orders (FPO) that may be applicable to you depending on your personal situation. Please read the descriptions to ensure you are using the correct document.
- FPO Draft for Non-vested, Cash Payment
- Member was not vested at the end date of the period of join accrual. Former pension partner has chosen a cash payment with income tax deducted.
- FPO Draft for Non-vested, RRSP Transfer
- Member was not vested at the end date of the period of join accrual. Former pension partner has chosen to transfer the payment directly to an RRSP with no income tax deducted.
- FPO Draft for Vested Under Age 55
- Member was vested at the end date of the period of joint accrual but is less than 55 years of age. Former pension partner’s payment must be transferred to a LIRA.
- FPO Draft for Vested Over Age 55 Immediate Division
- Member was vested at the end of the period of joint accrual and age 55 or older. Former pension partner has chosen to have an immediate payout to a LIRA.
- FPO Draft for Vested Over Age 55 Delayed Division
- Member was vested at the end of the period of joint accrual and age 55 or older. Former pension partner has elected to delay the transfer to a LIRA until the earliest of these events: the member’s retirement, reciprocal transfer to another pension plan, or their death.
- FPO Draft for Pension in Pay
- Member’s pension is already being paid. Former pension partner to receive a portion of the member’s monthly pension.