When a marriage or common-law relationship ends, your pension may be affected, and your ex-spouse may be entitled to part of your pension savings. Here is information that may assist you in understanding the steps to take to determine the value of your pension, and to meet your legal obligations for division of your pension assets.
You and your ex-spouse must complete an Application for Family Law Value. Ontario legislation has made this application mandatory for all members since January 1, 2012. The application will be submitted to Sun Life Financial for review.
Once completed, the forms, all necessary documents and the payment of the fee should be forwarded to:
Sun Life Assurance Company of Canada
Group Retirement Services
Attn.: Marriage Breakdown Team
P.O. Box 11001, Station Centre-Ville
Montreal QC H3C 3P3
Sun Life will review your application and will prepare a FSCO Family Law Form 4A "Statement of Family Law Value (Defined Contribution Benefit)". This will be forwarded to you and to your ex-spouse. It will indicate the amount that accrued during the period of marriage, the maximum amount that may be transferred to the former spouse and information on what steps to take to request a division of pension benefits.
Note: Additional voluntary contributions (AVC) are not included in the calculations and the parties are free to deal with that portion as they see fit in their agreement or court order. If there are no provisions for the AVCs, then no division of AVCs will be executed. AVCs are not locked-in and may be transferred to an RRSP. The remaining funds will be subject to locked-in provisions and the options for the former spouse will be a transfer to another pension plan, a LIRA, a LIF or annuity.
When in receipt of the Family Law Form 4A - Statement of Family Law Value (sent by Sun Life), the former spouse will be eligible to submit a request for the division of the member's pension benefits, by completing a FSCO Family Law Form 5 - Application to Transfer the Family Law Value. A copy of a court order or domestic contract/agreement must be included, along with any other required documents.
As well, a Canada Revenue Agency form T2151 must also be completed by the former spouse to direct the actual transfer and the financial institution receiving the funds will need to complete a Locked-in form confirming that your locked-in pension funds will be transferred to a locked-in account (LIRA, Locked In RRSP).
The division of your pension will be executed within 60 days of Sun Life receiving all necessary requirements, provided that the amount allocated to the former spouse does not exceed the limit prescribed by law. There are no taxes withheld on the transferred funds in a marriage breakdown.
More information, a tutorial and other assistance is available on the Ontario FSCO website.