Under New Brunswick’s Pension Benefits Act, the non-member spouse can receive a lump sum transfer from the pension plan to a locked-in retirement vehicle. For members who are not retired, this lump sum value is calculated by assuming that the member terminates their membership in the pension plan at the date of marriage breakdown. Interest is added and, if applicable, the proportionate pension payments are deducted from the commuted value from the date of marriage breakdown to the date of transfer. The non-member spouse can receive a maximum of 50% of the commuted value of the member’s pension benefits earned during marriage.
The New Brunswick Public Service Superannuation Act and Teachers’ Pension Act are exempted from New Brunswick’s Pension Benefits Act. This means that the pension division options on marriage breakdown described above do not necessarily apply to members of these pension plans (i.e. public servants and teachers); however, the pension division options on marriage breakdown for teacher’s and public servants are the same as described above for plans regulated by the Pension Benefits Act (i.e. an immediate lump sum transfer).
Note that federally regulated pension plans (i.e. banks, airlines, rail) may not divide the pension in the same manner as mentioned above and may only allow the division options available under the federal Pension Benefits Standards Act. Under the federal Pension Benefits Standards Act, up to 100% of the benefits earned during the relationship can be assigned to the spouse. If a portion of the member’s pension benefits are assigned to the spouse, the non-member spouse is deemed to have been a member of the pension plan and have terminated their membership in the plan. Most federal pension plans have established administrative policies as to how the non-member spouse can receive their share of the pension, however, typically they will have the choice of an immediate lump sum transfer or a deferred pension in the plan if the member is not retired and they will receive a pension from the plan if the member is retired (the plan may offer a lump sum option and they may convert the spouse’s pension to one payable for their lifetime). For more information, click here.
Federal government pensions are divided in accordance with Pension Benefits Division Act which only allows an immediate lump sum transfer from the pension plan to the non-member spouse. For more information, click here.