Presentation Transcript

1. Breaking Up is Hard to do – York’s Pension Plan Winter 2013
2. Purpose of this Seminar Steps required for a marriage breakdown calculation Impact to Pension Impact to Benefits Alternatives Other
3. January 1, 2012 Family Law Act and Pension Benefits Act were amended effective January 1, 2012 Changes were made to the process and calculation when there is a marriage breakdown Regardless of when the marriage breakdown occurred the new process must be followed The December 2011 edition of the P&B Times provided information regarding the changes
4. Common law spouse Under the Family Law Act, a common law spouse only has the right to seek support from his or her partner A common law spouse does not have the right to seek an equalization pension payment from the other spouse
5. Financial Services Commission of Ontario (FSCO) The FSCO website provides: All the necessary forms Frequently Asked Questions The link to the FSCO website is: http://www.fsco.gov.on.ca/en/pensions/Family-Law/Pages/familylawforms.aspx
6. Overview of New Process Complete Application Plan Administrator Responds Parties Decide Former Spouse Elects Plan Administrator pays former spouse Plan Administrator recalculates the member’s entitlement
7. Complete Application (Form 1) Plan member or former spouse can apply – if common law only the plan member can apply If both spouses are members of the York pension plan then each must make separate applications If any of the necessary information, documents or payment not provided the calculation is not completed until received
8. Application (Form 1) Application must include all required documents and the applicable fee First calculation is $400, any additional calculations are $800 per calculation Proof of age for plan member and former spouse Marriage Certificate or Form 2 (Joint Declaration of Period of Spousal Relationship) Administrator has 60 days to complete Form 4C once everything required has been received
9. FSCO Family Law Form 2 Completed when a copy of the marriage certificate is not available Plan member and former spouse complete and sign Witness signature required as well – anyone over the age of 18
10. * cost is $400 for the first calculation and $800 for each calculation thereafter
11. FSCO Family Law Form 3 This form is completed if you want to provide authorization for us to speak with your lawyer A separate Form 3 is required from your former spouse if they want to provide authorization for us to speak with their lawyer
12. FSCO Family Law Form 4C Once the figures have been determined form 4C is completed by us and sent to the relevant parties. Most applicants ask that a copy of the completed form 4C go to the plan member/lawyer and former spouse/lawyer
13. Next steps Parties decide whether there is going to be a division of pension assets If no division of pension assets FSCO Family Law Form 7 is to be completed If there is to be a division of pension assets the former spouse must initiate the action and use FSCO Family Law Form 5 (active members) or FSCO Family Law Form 6 (retirees) A certified copy of the court order, domestic contract or family arbitration award must be included with the application
14. Payment Restrictions If the plan member has transferred their pension plan entitlements out of the pension plan (i.e. employee has terminated or retired) then York pays nothing to the former spouse If the transfer ratio of the plan is less than one then the full amount is not paid out however the balance owing must be paid within five years of the initial payment date
15. Payment to Former Spouse Fund rate is applied to the money purchase (defined contribution) portion of the proceeds The same interest that was used in determining the minimum guarantee (defined benefit) portion of the proceeds is used to update this portion owed to the former spouse
16. Impact to Pension When the member has been married the entire time they have been in the pension plan then they will lose half of their pension entitlements Losing half of their pension entitlements will likely result in having to work much longer in order to be able to afford to retire
17. Impact to Benefits A former spouse can continue to be covered under the employee’s benefits plan (extended health, dental, and vision if applicable) The employee can cover one spouse/former spouse at a time In the event of a divorce the former spouse can not be covered, regardless of any agreement between the parties
18. Alternatives & FYI The parties may agree to divide other assets to leave the pension plan entitlements whole The parties may agree to divide a portion of the pension plan entitlements and use other assets to ‘cover’ the remaining portion owed Information provided to us throughout the process is kept confidential within the Pension & Benefits unit Marriage separation and divorce are in the top ten most stressful life events – you may want to seek assistance from various medical professionals
19. ASK HR Various answers to your questions can be found in the ASK HR database. Please try accessing this tool before contacting our office. The link is: ASK a Human Resources Expert | York University For example:
20. ASK HR
21. ASK HR
22. Need to contact Pension & Benefits? E-mail askpb@yorku.ca Call 416-736-2100 extension 27572 (askpb) – the phone line is open from 9:00 am to 4:00 pm Monday to Friday. For Fridays in June, July and August the phone line closes at 3:00 pm. Please have your employee ID ready when you call us. Any form or document that we may need from you can be completed, scanned and emailed to askpb@yorku.ca.