Partition process – SPPs and VRSPs
Partition itself is the second step when partitioning benefits accrued in a supplemental pension plan (SPP) or a voluntary retirement savings plan (VRSP), and results from:
- the valuation of a member's benefits and, for former married spouses or spouses in a civil union, the portion that was accrued during their marriage or civil union
- the judgment related to the breakdown of the union (former married spouses or spouses in a civil union), or an agreement reached between former de facto (common law) spouses or a notarized contract of dissolution between former spouses who were in a civil union.
The amount transferred to a former spouse is the amount provided for in the judgment or agreement, plus interest. The amount is usually expressed either as a proportion (e.g. half of the value of benefits accumulated during marriage) or a fixed amount (e.g. $20 000).
Conditions for applying for partition
Former married spouses
To be able to ask for partition, former married spouses must have obtained a judgment of divorce, separation from bed and board or civil annulment of marriage. Even if the former spouses reach an agreement, if there is no judgment, they cannot partition the pension plan.
Although the rules for family patrimony do not apply to some former married spouses, such as those who renounced it before 1991, they can still have partition carried out on a pension plan if their judgment or agreement makes provision to do so.
Former spouses in a civil union
To be entitled to partition, former spouses who were in a civil union must have obtained an annulment or dissolution of their civil union by a judge or before a notary.
Former de facto spouses
A plan member's former de facto (common law) spouse cannot demand to receive a share of the pension plan. To be able to partition these amounts, the former spouses must:
An agreement signed before the breakdown of the union is not valid.
The agreement does not have to be notarized or witnessed.
When to apply for partition
Former married spouses
The application for partition can be filed as soon as the time period for appealing the judgment has expired, that is, 30 days after the date on which the judgment was rendered.
Former spouses in a civil union
The application for partition can be filed, as the case may be:
- as soon as the time period for appealing the judgment has expired, that is, 30 days after the date on which the judgment was rendered
- as soon as the declaration of dissolution and the notarized contract are signed.
Former de facto spouses
The application for partition can be filed as soon as the former spouses reach an agreement.
Apply for partition as soon as possible
It is better to apply for partition as soon as possible. Otherwise, the member's former spouse may have difficulty obtaining the amounts owning.
This situation could arise if, for example, after employment ends, the plan member transfers the benefits before the application for partition has been submitted to the plan administrator. The administrator cannot act because the money is no longer in the member's account.
Unlike the Québec Pension Plan, partition of a pension plan is not automatic. One of the former spouses must ask the plan administrator.
The documents required may vary depending on the couple's situation.
Retraite Québec provides forms for applying for partition, along with detailed instructions to facilitate the process. There is one form for former married spouses and spouses in a civil union, and another for former de facto (common law) spouses.
The former spouse may choose whether he or she wants payment in cash or a transfer. In the latter case, he or she must choose the financial institution and the instrument to which he or she wants to have the money transferred. He or she must inform the plan administrator of his or her choice, and, if applicable, submit the appropriate tax form.
The administrator's deadline for transferring the money differs depending on whether the application for partition is filed by one or both of the former spouses. The administrator must be notified where to send the money.
If the former spouse fails to indicate a choice before this deadline:
- the administrator may choose where to transfer the money, but is not obligated to do so
- in the case of a supplemental pension plan, interest on the amount to be transferred ceases to accrue, and will begin again only once the former spouse has made his or her choice known.
How much does partition cost?
Some administrators carry out partition free of charge. However, the Supplemental Pension Plans Act and the Voluntary Retirement Savings Plans Act allow administrators to charge a fee.
Maximum fee in the case of savings in the form of capital (capital benefits)
$100, of which each spouse must pay $50
Maximum fee in the case of savings in the form of a pension (pension benefits)
$150, of which each spouse must pay $75
Maximum fee where the benefits accrued partly in the form of capital and partly in the form of a pension
$200, of which each spouse must pay $100
Legal references