How are pensions treated in Ontario property equalization?

Pensions are property under the Family Law Act and must be included in net family property. The portion of a pension that accrued during the marriage is included in the valuing spouse's net family property at the valuation date.

Pension valuation is often complex because the value is not simply the balance in an account — defined benefit pensions especially require actuarial valuation to determine the present value of a future income stream. Many financial statements prepared for equalization purposes include a certified pension valuation from an actuary.

In Ontario, spouses have two options for dealing with pensions: include the pension value in the overall equalization calculation (so that other assets offset it), or use a pension division order that splits the pension at source. The Pension Benefits Act and related legislation govern how pension plans can be divided. Because pension valuation mistakes can be costly, getting independent advice early is wise.