Public Sector Pensions in an Ontario Divorce: OMERS, Teachers', Federal

If you work in the public sector, your pension may be with OMERS, a teachers' plan or a federal public service plan. These plans are large and have their own administrators, forms and practices, which can make a separation feel more complicated.

This article explains the general Ontario rules that matter for pension division, what administrators typically need to see, and what you should confirm about your own plan. It does not describe the internal rules of any particular plan, because those need to be checked directly.

A public sector pension is still property

Ontario's equalization process compares each spouse's net family property at separation with the net family property at the date of marriage, and the spouse with the larger increase pays half the difference. Retirement savings are counted in the calculation.

Property owned at separation is valued as of the separation date. The government advises asking the pension administrator for the pension's value.

General Ontario rules that may apply

Under the family law division of the Pension Benefits Act in place since 2012, the former spouse's equalization share is limited to 50% of the Family Law Value. The administrator prepares a Statement of Family Law Value, which is fixed at the family law valuation date. The 50% cap applies to settlements made after 31 December 2011.

Whether these Ontario rules govern a specific public sector plan depends on how that plan is established and regulated. Some plans are governed by other laws, particularly federal plans, and the procedure and forms may differ. Do not assume that the Ontario forms discussed here will be accepted by every administrator. Ask the administrator which law and which forms apply, and confirm the answer with a lawyer.

• If an Ontario Pension Benefits Act plan: the family law value, FSRA forms and 50% cap discussed here are the starting point.
• If another type of plan: how it applies depends on the plan, so it is worth confirming with the administrator and a lawyer before you rely on any figure.
• In either case: the pension value is a matter of both law and the plan's terms.

What an administrator generally needs

Where the Ontario process applies, the plan member or spouse starts by asking for a family law value using FSRA Form FL-1. The order or agreement must state the valuation date, name the plan, and give the spouse's share as a dollar amount or a percentage not over 50%. The administrator has 60 days from a correctly completed application to pay the spouse.

If the member has not retired on the valuation date, the administrator can only pay a lump sum to a locked-in account such as a LIRA or LIF. The spouse applies on FSRA Form FL-5 with a certified copy of the court order, arbitration award or domestic contract.

How the value is calculated

For a defined benefit plan, the family law value is a preliminary value (a weighted average of commuted values) multiplied by a ratio of service during the spousal relationship over total service, capped at 1. For a defined contribution plan, FSRA's forms use the account balance, including earnings, at the valuation date. The value includes contractual indexation.

If you started in the plan before the relationship began, only the part of your service during the relationship counts in the ratio.

What to do next

Begin by collecting information about the plan, then ask the administrator how it handles marriage breakdown. Keep the questions specific and keep the answers in writing.

• Find the latest pension statement and the exact name of the plan.
• Ask the administrator which law governs the plan and which forms it uses.
• Ask how to obtain a value as of your valuation date, and whether Form FL-1 applies.
• Ask what the administrator needs to see in an order or agreement, and how long payment takes.
• Note the property claim time limit: six years from separation or two years from the day a divorce is final, whichever comes first.
• Have a lawyer review any agreement that divides the pension before you sign.

Because plans differ, a lawyer who can read your plan's documents is often the quickest way to learn what will actually happen to your pension.

Frequently asked questions