Eligibility for Pension Credit Splitting on Relationship Breakdown Extended to Common-Law Spouses

A Court of Queen’s Bench of Alberta decision issued April 13, 2018 gives common-law pension partners the same rights to split pension benefits as apply to legally married pension partners on marriage breakdown. It should be noted that the common-law pension partner must meet the criteria for being a pension partner as defined in section 1(3)(b) of the Employment Pension Plans Act (EPPA).

A “read in” effectively amends the legislation. What this means is that eligible common-law pension partners, on the breakdown of their relationship, may split pension benefits based on the same rules that apply to married pension partners. No more that 50% of the benefit accrued during the relationship may be paid to the pension partner, and the benefit is locked-in. As well, the period of an eligible common-law relationship immediately before the date of marriage is now included in the determination of the joint accrual period. This ruling only applies to Alberta members of pension plans registered under the EPPA or the equivalent legislation of another jurisdiction.

In order to comply with this new situation, agreements between common-law pension partners will need to meet the formal requirements of the Matrimonial Property Act.

The EPPA, the Employment Pension Plans Regulation and this court decision should be used to determine the specific legislative requirements that apply to the splitting of pension credits upon the breakdown of common-law relationships.

If you require assistance with a common law separation or cohabitation, please feel free to contact our office to speak with one of our experienced Family Law Lawyers.