Ending a relationship - and what it means for your pension
When you and your spouse separate or divorce, you’ll need to divide shared family assets. But it’s not just a house, car and shared bank account that you need to think about – you’ll also need to decide how to divide your pension.
There are many things to consider when a relationship ends. For this reason it’s often wise to have an independent professional, such as a lawyer, help you navigate the decision-making process and advise you on your options.
In the discussion below, we’ve assumed that you and your former spouse have agreed to divide the pension benefit. Here’s what that might mean for both of you.
If you separate before you start receiving your pension
Your former spouse can receive their share of your pension as soon as you reach your earliest retirement age. It doesn’t matter if you’re not yet retiring, or if you’ve left WorkSafeBC and are now working for a different employer.
Your former spouse may also be able to choose how they want to receive their share of the pension – as a lump-sum transfer payment to a registered retirement plan (like an RRSP) or as a lifetime monthly pension.
When you retire and apply for your pension, we’ll adjust your payment to reflect the portion of your pension that we pay directly to your former spouse. This means your pension payment will be less than it would be if you were still in the spousal relationship.
If you die before you start receiving your pension, your former spouse is generally entitled to 50 per cent of the pension benefits you earned during your relationship.If your former spouse dies before you start receiving your pension, we will pay their remaining share of the pension benefit to their estate or beneficiary . This only applies if they are a limited member of the plan and they have not yet started receiving their share of your pension, or if their estate or beneficiary becomes a limited member.
If you separate after you start collecting your pension
If you separate after you retire and are collecting your pension, your former spouse cannot choose a specific pension option. Whatever pension option you chose when you retired will also apply to them.Your former spouse may want to directly receive their share of the pension into their bank account each month. They can do this by applying to become a limited member of the plan.
If you die, your former spouse may continue to be paid their share of the pension (it depends on the pension option you chose) and they will automatically receive a survivor benefit. Under BC law, you can’t transfer this survivor benefit to someone other than your spouse unless your former spouse gives up their right.
If your former spouse dies, we will pay their remaining pension benefits to their estate.
What you need to do
As you can see from the summary above, dividing a pension after a separation is complicated: there are many issues to consider and decisions to make. You can explore the resources on this site to learn more about what’s involved, but some of the basic actions you may need to take include:
- Giving us permission to share information about your pension with a third party, such as a lawyer
- Letting us know how to divide the pension
- Getting your former spouse to become a limited member of the plan
- Having both you and your former spouse update your beneficiary information
- Updating your names and contact information, if they have changed as a result of the separation