Pension, Divorces and Retirement Fund Splitting

what happens to my retirement when I get divorced

Wondering how your pension and retirement will be split when you get divorced? 

Since pensions are property under the Family Law Act, they are included in each partner’s net total assets. 

Read below to understand what happens to your retirement and pension savings during divorce. 

Splitting Canada Pension Plan Credits

According to the Canada Pension Plan (CPP) all contributions you and your spouse or common-law partner made during the time you lived together can be equally divided after a divorce or separation. 

This is what the government refers to as “credit splitting”.

When it comes to credit splitting, they can be divided even if one spouse or common-law partner did not make contributions to CPP. 

How Many Credits Are You Entitled To?

The impact of a credit split can vary, depending on your circumstances. 

In some cases, a credit split can have a major impact on future CPP benefit amounts, in other cases the impact is negligible.  

The spilt is initiated by either party submitting a form to the government setting out each party’s SIN and the dates of marriage and separation.  CPP then sends a notice to the other party to challenge the request and, if no challenge is made, the credits accumulated during the marriage are split equally between the parties.

How to Protect Your Retirement Savings

If you get divorced, or are seriously considering it, it is more important than ever to create a plan to determine how your retirement assets will be divided

Here are some ways to protect your retirement:

  1. Be prepared: Sometimes the number one cause for losing your retirement savings is because you are ill-prepared in your plan when you file for divorce. 
  2. Get legal representation: The best way to be prepared is to get the right legal counsel so that you know all the rights you are eligible for. 
  3. Create a “marriage” or “spousal” agreement (prenup): The best way to avoid losing retirement savings is to draft a spousal agreement before you marry. This is a full proof way to ensure your savings stay with you. 

Process of Valuation & Division: How Much Can You Lose?

The Ontario family property rules apply to married spouses.  

The easiest way to know how much you may have to give to your spouse is to calculate your Net Family Property. Net Family Property determines the total value of your assets as an individual. 

If one spouse has a higher Net Family Property, that spouse would be required to pay (referred to as equalization payment) the other spouse to ensure that the difference is equal. 

For example:

Spouse #1 Net Family Property: $220,000

Spouse #2 Net Family Property: $100,000

Therefore spouse #1 would need to may $60,000 to spouse #2 to satisfy their obligation and then both spouses would walk away with an equal $160,000. 


Thinking of getting a divorce, but dealing with a spouse that is not willing to cooperate, or you have questions about your assets and how they will be divided? If this is you, feel free to call our office today to book a free 30-minute consultation.

Although you might feel like you don’t need a lawyer for your divorce, it’s best to connect with a one to ensure that you aren’t giving up more than you should in your separation, or getting less than you deserve. 

This blog is made available by the law firm publisher, Epstein & Associates, for educational purposes. It provides general information and a general understanding of the law but does not provide specific legal advice. Any specific questions about your legal concerns please contact us now and speak to an expert today.