Relationship Breakdown
It is important to notify us of a separation from a Spouse or Common-law Partner. Your pension is a family asset. In the event that there is a written agreement or court order dividing family assets, section 31(2) of Manitoba's Pension Benefits Act (the "Act") requires that pension benefits earned during the relationship be divided unless there is also an agreement or order that it is not to be divided. Under the Act, your Spouse or Common-law Partner could be entitled to up to 50% of the pension earned during the relationship.
A former Spouse or Common-law Partner’s entitlement and the process for agreeing not to divide depend on the legislation in effect at the date of separation. WCEBP cannot provide legal or financial advice. We recommend that both parties obtain legal and financial advice for assistance to understand your options and complete the appropriate documents.
An agreement or order specifying the division of your pension (or that a division is not required) must be filed with WCEBP.
If, after the separation is settled, there is no written agreement nor court order dividing family assets, you must notify WCEBP in writing.
It is very important to note that if WCEBP has not received the required documentation prior to a benefit becoming payable from The Winnipeg Civic Employees’ Pension Plan, it may affect processing times and amounts payable.
A division of the pension must be made only after the parties have received a Statement for Division of Pension. If family assets are being divided by way of a written agreement or court order, you may request a Statement by completing a Request for Statement – Division of Pension on Relationship Breakdown form. The Statement will provide you with the value of the pension earned during the period of the relationship and an explanation of the options available for resolving the matter.
DIVISION OPTIONS
Effective October 1, 2021, the percentage of a Member’s pension to be paid to the Member’s former Spouse or Common-law Partner on a division must be specified in a written agreement or by an order of the court made under The Family Property Act. The percentage specified must not be more than 50%.
A written agreement or court order may specify that the Member’s Spouse or Common-law Partner is not entitled to any portion of the Member’s pension.
Before agreeing to receive a percentage of less than 50% on a division, the Member’s Spouse or Common-law Partner should seek legal advice with respect to their family law entitlements, and financial advice as to the implication of agreeing to receive less than 50%.
WCEBP will not proceed with any option until all requirements have been met.
If your date of separation is prior to October 1, 2021, this change does not apply to you. See the pre-October 1, 2021 information below or contact us to learn more about the legislative requirements specific to you.
Separation Before Retirement
If an active Member’s pension is divided, the former Spouse or Common-law Partner will receive a lump sum Commuted Value of up to 50% of the pension benefit earned during the relationship, plus interest (positive or negative) to the date of payment in accordance with the Plan’s policies and the Pension Benefits Act.
Unless the pension is a small pension, the Commuted Value would be locked-in and must be transferred to a LIRA (locked-in retirement account), LIF (life income fund), life annuity contract, or a pension plan administered in the manner prescribed by the Act. Locking in means that this amount must be used to provide retirement income – it cannot be withdrawn as a lump sum cash payment except in limited circumstances (for more information, contact Manitoba’s Office of the Superintendent – Pension Commission).
The Member’s Credited Service and Required Contributions would be reduced by an amount that corresponds to the percentage paid to the former Spouse or Common-law Partner. A reduction to the Member’s Credited Service will reduce the amount of pension payable to the Member.
Separation After Retirement
If a relationship ends after retirement and the pension is required to be divided, the former Spouse or Common-law Partner is entitled to up to 50% of the pension earned during the period of cohabitation, which is determined, based on Credited Service, as a pro-rata portion of the total pension. There are two options to resolve the matter:
- The Member and former Spouse or Common-law Partner may agree to split the in-pay pension into two separate lifetime pensions going forward (payments retroactive from the pay period the pension is split back to the date of separation would need to be handled outside of the Pension Plan
- The Member and former Spouse or Common-law Partner may agree not to divide the pension. The former Spouse or Common-law Partner would continue to be entitled to receive the survivor benefit elected at retirement.
Pre-October 1, 2021 legislation
Your pension is a family asset. If you and your Spouse or Common-law Partner end your relationship, the pension you earned during your relationship will be taken into account when your family assets are divided. Under Manitoba’s Pension Benefits Act, your Spouse or Common-law Partner is entitled to 50% of this pension.
A Spouse or Common-law Partner cannot legally waive the right to an asset unless the value of the asset is known. The value of your pension is available only from WCEBP; therefore, it is essential that you contact WCEBP if a breakdown has occurred, regardless of which of the options below you and your former Spouse or Common-law Partner decide to pursue.
To begin the process of determining the value of your pension, you or your former Spouse or Common-law Partner should submit a Division of Pension on Relationship Breakdown enquiry form. Upon receipt of this form, WCEBP will send both you and your former Spouse or Common-law Partner a statement showing the value of your pension benefit earned during the period of marriage or common-law relationship. This statement will also list your options and provide instructions for how to proceed.
You have three options if your relationship ends before you retire
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Option
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How it works
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50/50 credit split
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The commuted value of your pension benefit will be prorated to determine the value of the benefit earned during your period of marriage or common-law relationship. Half of the prorated value will be transferred to your former Spouse or Common-law Partner. Funds must be transferred to a Locked-In Retirement Account (LIRA) or another registered pension plan, unless the amount falls under Small Pension rules. Corresponding reductions will be made to each year of your Credited Service, and to your contributions.
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Split the difference
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If your former Spouse or Common-law Partner also belongs to a pension plan, you may split in half the net difference between your pension benefit and your former Spouse or Common-law Partner’s. In this scenario, only the higher value pension is adjusted. Credited Service and contributions are reduced, and a commuted value representative of the reduction is then transferred to the individual with the smaller pension. Funds must be transferred to a Locked-In Retirement Account (LIRA), unless the value of the net difference falls under Small Pension rules.
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Opt out
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If both you and your former Spouse or Common-law Partner agree, you may opt out of dividing your pension benefit by submitting a written agreement to the Program. The agreement must acknowledge
- each party entered into it voluntarily,
- both received independent legal advice, and
- both received a statement from the Program showing the value of your pension benefit earned during the period of marriage or common-law relationship.
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Note: While your Credited Service is reduced under Option 1 and Option 2, your eligibility service is not affected. This reduces the amount of your pension at retirement, but does not affect when you qualify for unreduced early retirement benefits.
You have two options if your relationship ends after you retire
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Option
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How it works
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50/50 credit split
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Your former Spouse or Common-law Partner will receive a lifetime pension from the Pension Plan equal to one-half of the portion of the pension you earned during your marriage or common-law relationship. Your pension will be reduced by this amount.
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Opt out
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The mandatory division of your pension benefit may be waived if you and your former Spouse or Common-law Partner both agree to it in writing. The agreement must acknowledge
- each party entered into it voluntarily,
- both received independent legal advice, and
- both received a statement from the Program showing the value of your pension benefit earned during the period of marriage or common-law relationship.
If waived, your former Spouse or Common-law Partner would continue to be entitled to the survivor benefit chosen at retirement if you predecease him/her.
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