Q: I was married to a Navy man, went through mediation and it was in our divorce settlement that I was entitled to receive half of his military pension. I thought I had to wait until he turned 65 to be entitled to half but I’ve been told that as soon as he left the Navy he was getting his pension. So I’m not sure if I can receive the split pension or not. How do I find out?
A: Mediation is a wonderful way to settle marital disputes. Unfortunately, some mediators do not come from a financial background and therefore sometimes things get missed or misrepresented.
Once a settlement is mediated, it is always best that each participant receives independent legal advice and it is at this point that your entitlement and access to the pension should have been discussed. I am not clear on how long ago this actually took place, however in 2015, the pension legislation in Canada was changed.
Since this time, an individual entitled to equalization of pension had immediate access to transfer this pension to their personal Locked-in RRSP. Once the transfer has taken place then, depending on your age and need, there are ways that you can access it.
If your agreement was prior to 2015, then I would suggest you contact your legal counsel and have them advise you on who to contact or how to access this pension. You may still be able to transfer your portion to a private plan.
However, if you are under to the old rules, then you may only be entitled to take your portion as an income stream. Either way, it makes sense to take the time to figure this out, as this is usually a significant asset in the equalization process.
Pensions have always been a very delicate issue when negotiating a settlement and, understanding how they work, how they are valued, and how you get access can be tricky. As a certified divorce financial asset working with clients, I always make sure their entitlement is transferred and signed at the exact same time as the separation agreement. It is then in the control of the entitled party and can be used as an asset to plan towards future income goals.
Debbie Hartzman is a certified divorce financial analyst in Kingston, Ont.
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