Division of Pension Benefits—Canadian Armed Forces pensions

This package provides information about the division of pension benefits upon marriage or common-law relationship breakdown in accordance with the provisions set out under the Pension Benefits Division Act (PBDA). This information is specific to the following audiences:

• Regular Force members who enrolled before March 1, 2007
• Regular Force members who enrolled on or after March 1, 2007
• Reserve Force members who have qualified for the Regular Force (Full-Time) Pension Plan (Part I)

This package is intended for contributors under Part I of the Canadian Forces Superannuation Act (CFSA) and their spouses or former spouses/common-law partners. It is for information purposes only. In the event of any discrepancies between the content of this package and the Pension Benefits Division Act (PBDA) and its associated regulations, the latter will prevail.

The PBDA came into force on September 30, 1994 and provides a mechanism for the division of pension benefits upon marriage or common-law relationship breakdown. The eligible applicant has to apply for a division of pension and produce a court order or written agreement providing for a division of pension benefits. Pension benefits can be divided as part of the division of family assets to a maximum of 50% of the value of the pension benefits accumulated during the period of co-habitation.

Division of pension benefits

Explore the following sections to learn more about the division of pension benefits:

• Eligibility requirements
• Process overview
• Request for estimate
• Application for division
• Division and payment
• Adjustment to the plan member's pension benefits
• Process workflow
• Client concern escalation process

Eligibility requirements for eligible applicants

The pension benefits that are to be divided must have accumulated during the period of co-habitation, while married or living together in a common-law relationship. The following individuals may apply for a division of pension benefits:

• Plan member
• Spouse or former spouse (same sex or opposite sex) who has been living separate and apart from the plan member for at least one year. The couple may be separated for less than one year if the application for division is based on a court order pertaining to divorce, annulment or separation that stipulates the division of pension benefits between the two parties;
• Former common-law partner (same or opposite sex) who has co-habited with the plan member for at least one year and who has been living separate and apart for at least one year; or
• Representative of the plan member or a representative of the spouse or former spouse/common-law partner. This individual has to provide a certified true copy of the document that authorizes acting on behalf of the applicant

Process overview

There are four steps in the process related to the division of pension benefits.

Step 1: request for estimate on division of pension benefits

You may request an estimate of the maximum transferable amount allowed for division before making an application. You can request an estimate even if you are not yet separated or divorced. Refer to the Request for estimate section for specific details, including required documents and forms.

Step 2: application for division of pension benefits

The application for division of pension benefits is the process for an eligible applicant to formally request a division of the plan member's pension benefits, accumulated during the period subject to division, as stated in a court order, written agreement or supplementary documentation.

Refer to the Application for division section for specific details, including required documents and forms.

Step 3: division of pension benefits and payment

Once the application is approved, the division payment is transferred into a locked-in registered retirement vehicle chosen by the recipient. In some cases, a portion of the payment may be paid directly to the recipient and taxed at source. Refer to the Division and payment section for specific details.

Step 4: adjustment to the plan member's pension benefits

After the division payment has been transferred to the recipient's locked-in registered retirement vehicle, the plan member's pension benefit is adjusted to reflect the division of pension benefits. We will notify the plan member of the resulting adjustment.

Refer to the Adjustment to the plan member's pension benefits section for specific details.

Process workflow and time frame

Refer to the Process workflow section for specific details in respect of the division of pension benefits and associated time frame.

Request for estimate

An estimate can be requested even if you are not yet separated or divorced.

Normally an estimate can only be provided once within a 12 month period unless:

• You have ceased to cohabit with your spouse, former spouse, common-law partner or former common-law partner
• You or your spouse, former spouse, common-law partner or former common-law partner began proceedings in relation to separation, divorce or annulment
• You and your spouse, former spouse, common-law partner or former common-law partner entered into an agreement or
• Your pensionable service included in the period subject to division has been adjusted

Estimate

The estimate calculation is based on the value of the plan member's pension benefits accumulated during the period of co-habitation and on the information you provide. The estimated amount can change significantly with fluctuation in interest rate assumptions. Once an estimate is requested, the Government of Canada Pension Centre will prepare and send a PBDA Pension Benefits Report, advising the applicant of the estimated division amount.

Documents and forms for an estimate

• Required Form: Request for Pension Benefits Division Information with respect to a Canadian Forces Superannuation Act Pension in Accordance with the Pension Benefits Division Act (CF-FC 2488)

  This form is required to request an estimate of the maximum transferable amount. Ensure that you provide the plan member's name and date of birth otherwise the form will be considered invalid and will be returned to the sender.

• Required if available – Copy of the court order or written agreement that:
  • provides for the division of the accrued pension benefits and that
  • establishes the exact dates (dd/mm/yyyy) of the co-habitation period

  If you do not have a court order or written agreement or if all the information required, as specified in paragraph 2 above, is not included in the court order or agreement, you must complete the Statutory Declaration in the matter of an application of Pension Division Benefits (CF-FC 2484) form. If your spouse should request an estimate, the Statutory Declaration in the matter of an application of Pension Division Benefits (CF-FC 2484) form, to be valid, must be witnessed by a lawyer, notary public or commissioner for taking oaths. There is no requirement to have the form witnessed when you, as a plan member, request an estimate.

• If applicable - Authorization to act on behalf of the applicant

  You only need to provide this document if you are a representative acting on behalf of the plan member or on behalf of the spouse or former spouse/common-law partner. It must be the original or a certified true copy.

Once completed, the respective documents and forms must be forwarded to the Government of Canada Pension Centre. Ensure that the member's name, date of birth, Service Number (SN) or Pension Number are clearly indicated on the form requesting an estimate, otherwise the form will be considered invalid and will be returned to the sender.

Application for division

This section provides you with the details you will need to complete an application for a division of the pension benefits accumulated during the period of co-habitation. It includes the required documents and forms. The spouse or former spouse/partner may make an application for a division as soon as there is a court order or a written agreement providing for the division.

Application

Once there is court order or written agreement for the division of your pension benefits in place, you must submit an application in order for a division to occur as the division is not carried out automatically upon divorce or separation. This can be done at any time. You may also withdraw an application for division at any time until the division payment is transferred to the locked-in registered retirement vehicle. Refer to the Division and payment section for specific details pertaining to the payment process.

Documents and Forms for an Application

• Required Form: Application for Division of Pension of a Canadian Forces Superannuation Act Pension Benefits in Accordance with the Pension Benefits Division Act (CF-FC 2486)

  This form is required to apply for a division of the pension benefits accumulated during the period subject to division, as stated by the court order, written agreement or supplementary documentation.

• Required – court order or written agreement that:
  • provides for the division of the accumulated pension benefits and that
  • establishes the exact dates (dd/mm/yyyy) of the co-habitation period

  If the period of co-habitation is not included, you have to complete the Statutory Declaration in the matter of an application of Pension Division Benefits (CF-FC 2484) form.

  To be valid:

  • a lawyer, notary public or commissioner for oaths has to witness the PBDA Statutory Declaration (CF-FC 2484) form
  • the court order has to be certified, bearing an original signature or stamp
  • the written Agreement has to be the original or a certified true copy
• If applicable – Authorization to act on behalf of the applicant

  This document authorizes a representative to act on behalf of the plan member or on behalf of the spouse or former spouse/common-law partner. It must be the original or a certified true copy.

• If applicable – Copy of the marriage certificate

  A copy of the marriage certificate is required unless the period subject to division is mentioned in the court order.

Once completed, the respective documents and forms must be forwarded to the Government of Canada Pension Centre. Make sure that the member's name, date of birth, Service Number (SN) or Pension Number is clearly indicated on the application form, otherwise the form will be considered invalid and will be returned to the sender.

Notification and objection

When an application for the division of the pension benefits has been approved, both parties having an interest in the application (from here forward referred to as the applicant and non-applicant) will be notified in writing.

The recipient of the division payment will also be provided with instructions on how to direct the payment into a locked-in registered retirement vehicle once the application is approved. Refer to the Division and Payment section for additional details pertaining to the payment of the amount subject to division and required forms.

The non-applicant has 90 days to file a notice of objection to the division from the date of being notified of the application for division. An objection to the division may be filed in writing to the Government of Canada Pension Centre. If the objection is valid, the application for division is put on hold until the objection is resolved.

There are three grounds for objection:

• the court order or written agreement has been changed or is no longer valid or
• the terms of the court order or written agreement have been or are being satisfied by other means or
• proceedings are under way to appeal or review the court order or to challenge the terms of the written agreement (documents from the court are required to confirm that such proceedings are underway)

Documentation in support of the objection must be forwarded to the Government of Canada Pension Centre within the 90 day objection period. Once the objection period has expired and no objection has been received, the division will be processed. Refer to the Division and Payment section for details.

If the non-applicant is able to prove grounds for objection, the application for division will be refused unless or until there is a new court order or written agreement that allows for the division to proceed. The application for division can also be refused, if the Government of Canada Pension Centre cannot determine the period subject to division, as a result of a dispute regarding the dates of co-habitation.

Division and payment

This section provides specific details pertaining to the calculation and payment of the amount resulting from the division of pension benefits.

The plan member's accumulated pension benefits are subject to division before or after retirement. For the member who is in receipt of monthly pension payments, the maximum transferable amount is based on the value of future pension payments only.

Calculation of the division of pension benefits amount

Depending on the terms of the court order or written agreement, the recipient can receive up to 50% of the actuarial present value of the plan member's pension benefits accumulated during the period subject to division. The actuarial present value is a lump sum equivalent to a pension benefit normally payable in the future. If the court order or written agreement provides for the transfer of a smaller lump sum amount, this smaller amount will apply.

Payment of the pension benefits division amount

Locked-in provisions

The division payment is transferred as a lump sum directly to a locked-in registered retirement vehicle chosen by the recipient. The recipient can also choose to have the funds transferred to a life income fund, to another registered pension plan or to a financial institution or life insurance company for the purchase of an immediate or deferred life annuity. The division payment can be transferred into several accounts, as long as they are locked-in registered retirement vehicles. Recipients are responsible for consulting with their chosen institution as to their financial options.

Required forms

• Certification of Lock-in Purposes of the Canadian Forces Superannuation Act or the Pension Benefit Division Act (CF-FC 2347-18) - The chosen financial institution has to complete this form to certify that the division payment will be administered in accordance with the locked-in provisions of the PBDA
• Direct Transfer of a Single Amount Under Section 147(19) or Section 147.3 T2151 - This form is required by the Canada Revenue Agency (CRA) to verify that the funds are transferred to a Registered Retirement Savings Plan (RRSP). It is available through your financial institution or on the Canada Revenue Agency Website

Tax implications

As the division payment is transferred into a locked-in registered retirement vehicle, taxes do not apply until the recipient starts receiving periodic benefits from the chosen financial institution. However, if any portion of the division payment exceeds the limits allowed under the Income Tax Act, it is paid directly to the recipient and income tax is withheld at source. For additional details on income tax, we invite you to consult the Canada Revenue Agency Website.

Adjustment to the plan member's pension benefits

When the division payment is transferred to the recipient's locked-in registered retirement vehicle, the plan member's pension benefits will be adjusted and the Government of Canada Pension Centre will notify the member accordingly.

For plan members in receipt of ongoing pension benefits, the adjustment will take effect the first of the month following the division.

If the plan member has less than 20 years of service, and is in receipt of an immediate annuity on account of being disabled on release, the reduction starts on the first day of the month following the member's 60th birthday.

Process workflow

This section provides specific details in respect to the division of pension benefits process workflow and associated time frame.

While we intend to process requests within the specified time frame, in some cases, the process may be delayed for reasons beyond our control. Some possible reasons for delays are:

• Your request for an estimate or application for division is incomplete and/or supporting documents are missing
• difficulty in obtaining information from the spouse or former spouse/common-law partner or
• difficulty in obtaining information from the plan member's current employer or
• difficulty in obtaining information from the financial institution(s)

Timeline

• When a request for information about the division of pension benefits is made, the Pension Expert will return phone calls within 48 hours, and within five working days for written requests
• Once the Pension Expert receives all required documentation, the estimate for a division of pension benefits should be processed within five working days
• Once an application is made for a division of pension benefits, a letter will be sent to both parties, who have 90 days from the date of the notification letter to make an objection
• Once the objection period has passed and no objection has been received, the division will be processed within 120 days of receipt of an application or within 45 days of receipt of all required documentation