Splitting Canada Pension Plan With Your Ex-Spouse
Upon separation or divorce, your Canada Pension Plan (CPP) credits may need to be shared with your former spouse. In Alberta, CPP credits are considered to be family property with the presumption that they will be shared equally during the period of joint accrual, unless one of the exceptions apply. Usually the date of joint accrual is the date of marriage or when you became common-law partners under provincial legislation (in Alberta, it’s called adult interdependent partners), and ends the December of the year prior to your separation.
The division of CPP credits can only take place after a divorce or separation. Division of CPP credits can still take place even if one of you did not contribute at all to CPP.
If your former spouse dies, you must apply to split the credits within 36 months of the date of death; if you do not, then you will not be allowed access to the credit splitting. You are also not allowed to split the credits if your former spouse has reached age 70. If you have ended a common-law partnership, you must apply within 48 months from the date you started living apart.
Alberta allows you to opt out of CPP credit splitting if both parties agree; you may do so by signing a separation agreement with independent legal advice stating that you are each waiving your entitlement to the other person’s CPP credits. In cases where both spouses have worked for the same amount of time, and have earned roughly the same income, or in cases were the length of marriage was short, this may be an appropriate option. That’s because in some cases, there can be a net loss to the CPP credits. However, it is always recommended to get legal advice on this issue first.
If your agreement and/or Court Order is silent on the issue of CPP, then either party can apply to Canada Pension Plan to split credits without the other party’s input, as long as they eligible under the CPP guidelines and policies.