Can a Separation Agreement Cover Pensions and Debts in Ontario?

Yes. A separation agreement can deal with property, including a spouse's share of a pension within set limits, because spouses can divide property any way they agree in it. Each spouse should have their own lawyer review it before signing, and the agreement cannot easily be changed later.

For married spouses, debts reduce the value of what each person owns when net family property is worked out, and the spouse with the larger net family property pays the other an equalization payment. A workplace pension is valued using the imputed value set under the Pension Benefits Act, and a domestic contract cannot entitle the eligible spouse to more than 50% of that imputed value. Common-law partners are outside equalization and need not split property, but a partner who contributed to property the other owns may have a claim, settled in the agreement.

Whether a debt stays with one person as against a creditor depends on the loan terms and who signed for it, so confirm this with a lawyer. To transfer a share of a pension, the application must include a certified copy of the agreement stating the family law valuation date, the applicant's entitlement and the amount to be transferred. Retired members have stricter conditions for an immediate lump-sum transfer.