Dividing Benefits under the Pension Benefits Act of Nova Scotia

Transcription

1 Dividing Benefits under the Pension Benefits Act of Nova Scotia Nancy MacNeill Smith Superintendent of Pensions April 7, 2006

2 Request Information File Form 5 with pension plan administrator Can only be filed by a spouse or partner living separate and apart from the member

3 Administrator Must provide the information necessary to value the member s pension benefit Information to be provided within 60 days of receiving Form 5 Member notified that the spouse or partner has submitted Form 5. Updates to the information provided only once in each calendar year

4 Decision or Apply to divide the pension benefit trade off the value of the benefits by dividing other assets unequally

5 Trade Off Other Assets Process under the Pension Benefits Act ends

6 Decision to Divide Pension Benefit Requires a court order or separation agreement Limit to no more than half of the benefit Entitlement date and the percentage of the benefit awarded to the spouse or partner The entitlement date is the date on which the spouse or partner becomes entitled to a division of the pension or pension benefit

7 Identify the Applicable Situation Is the member retired? Is the member s benefit a defined contribution benefit? Is the member s benefit a defined benefit? Has the benefit been transferred to a LIRA or LIF?

8 The Member is Retired and Collecting a Pension File court order or separation agreement with administrator File Form 6:Request for Designation as Limited Member of Pension Plan Receive a proportionate share of the pension until death or pension ceases Receive the same information from the administrator as the retired member Separate source deductions made

9 How is the Proportionate Share Determined? Proportionate share= P x (A/B) P is the percentage of the pension to be credited to the spouse or partner specified in the court order or separation agreement A is the pensionable service of the member from the date of marriage or common-law relationship to the entitlement date B is the total pensionable service accumulated by the member to retirement

10 The Member has a Defined Contribution Benefit Transfer the benefit out of the plan or Become a limited member of the plan

11 Transfer of a Defined Contribution Benefit The transferred benefit must be used to provide a pension File Form 7 and court order or separation agreement with administrator Administrator advises member of receipt of Form 7 (using Form 8) The administrator transfers the proportionate share to a LIF, LIRA, to a life annuity or another pension plan

12 Proportionate Share of a Defined Contribution Benefit Proportionate share= (A/B) x C X P A is the pensionable service from first of relationship to the entitlement date B is the pensionable service to the date on which share is transferred or established in a separate account C is the total contributions and earnings of member to the date the share is transferred or established in a separate account P in the percentage specified in the court order or separation agreement

13 Becoming a Limited Member - Defined Contribution Benefit File Form 6 and court order or separation agreement with administrator Retirement when limited member reaches retirement age The limited member is entitled to the same information from the administrator as the member

14 Becoming a Limited Member - Defined Benefit File Form 6 and court order or separation agreement with administrator Proportionate share of the pension of pension payable to member Proportionate share converted into a pension based on the limited member s age The limited member s pension commences at the member s retirement date

15 Proportionate Share of a Defined Benefit Proportionate share = P x (A/B) P is the percentage specified in the court order or separation agreement A is the pensionable service from the first of the relationship to entitlement date B is the total pensionable service to the member s date of retirement

16 Member s Funds are in a LIRA or LIF File with fund holder a copy of the court order or separation agreement File Form 7with the fund holder Financial institution will transfer proportionate share to A LIRA or LIF

17 Administrative Fees charged by Administrator Up to $500 for division of a defined benefit Up to $250 for division of a defined contribution benefit Up to $650 for a division of a defined contribution benefit and defined benefit held under one plan

18 Guide A guide to understanding the Division of Pensions and Pension Benefits for Separating Spouses and Common-Law Partners