Our top rated Vancouver RRSP family property lawyers handle hundreds of family property and excluded property cases. Our #1 ranked Vancouver RRSP family property lawyers deal with RRSP and pension division cases routinely and our experienced lawyers warn that these assets have tax consequences that make them different than equity in a family home or cash iun a bank account.
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Vancouver RRSP Family Property Lawyers
Our top rated Vancouver RRSP family property lawyers summarize a recent RRSP and LIRA division case under the new Family Law Act case of Lade v. Perreault, where the court decided:
[21] In order for a pension be divided pursuant to Part 6 of the FLA, there must be a pension plan to which the person is a member, and to whom a pension will be paid or is being paid. That person is not the respondent. There is no administrator of the LIRA. The respondent makes decisions relating to where the LIRA is located, how the LIRA is invested subject to certain restrictions contained in the Regulations of the PBSA.
[22] The respondent, amongst other options, was entitled to invest the commuted amount into a LIRA. He chose a registered retirement savings plan (“RRSP”). A LIRA is a RRSP.
[23] Since the LIRA is a RRSP or a RSP (s. 84(2)(e) of the FLA), it is divisible under Part 5 and not Part 6 of the FLA.
[24] To confirm my conclusions, I refer to the British Columbia Law Institute Study Plan No. 6 dated March 2013, which, in a question and answer format, stated the following:
1.18 Do the Part 6 rules regarding the division of benefits apply to RRSPs. Does it make any difference if the RRSP was funded by a transfer from a pension plan and the benefits are locked-in?
Commentary: Part 6 does not apply to RRSPs, whether or not the benefits were transferred from a pension plan.
Although Part 6 doesn’t apply to RRSPs, this presents no practical problem. RRSPs are family property under Part 5 of the FLA (s. 84(2)(e)). The Income Tax Act accommodates transfers from RRSPs and RRIF’s on the breakdown of a relationship. [See ITA Form 2220(e), ITA ss. 146(16)(b) and 146.3(14)]. B.C. pension division rules do not replace or otherwise affect those options for dividing the account balance between former spouses.
If the RRSP is locked-in (see para. 10.4), however, the transferred funds would be subject to the same locking-in rules.
[25] Counsel for the respondent referred to South v. De Asis, 2013 BCSC 278. In South, there was a LIRA that was owned by the husband. The LIRA increased in value due to “market forces”. The wife sought its division equally or in some other proportion pursuant to the Family Relations Act, R.S.B.C. 1996, c. 128 [FRA]. The husband argued that it was not divisible pursuant to Part 5 of the FRA, but rather Part 6 of the FRA; the latter of which divided pensions.
[26] Madam Justice Russell said at para. 74:
[74] I do not have any admissible evidence before me that would provide guidance on how to characterize a LIRA. However, I do note that the transfer of pension contributions into a “locked-in RRSP” is heavily regulated. The transfer of pension contributions of a member that terminates their membership is governed by the Pension Benefits Standards Act, R.S.B.C. 1996, c. 352 [PBSA]. The Pension Benefits Standards Regulation, B.C. Reg. 433/93 [PBSA Reg.] governs the contractual terms of a “locked-in RRSP” that receives the pension contributions.
[27] Russell J. did not have before her an analysis of the then Part 6 of the FRA and those sections of the PBSA to answer the question posed by her in para. 74 of her reasons.
[28] In any event, Russell J., as an alternative, stated:
[96] Even if I had found the LIRA was not a pension, I would have reapportioned the LIRA 100% in Mr. South’s favour based on my reapportionment findings.
[29] South does not apply in this case as reapportionment is not an issue before me. Reapportionment under the FRA and the FLA are considerably different.
DECISION
[30] The increase in value of the LIRA (RRSP) at the CIBC is a family asset. The claimant is entitled to one-half of the increase in value over the sum of $174,494.46. That amount is $54,575.50.
[31] The respondent shall rollover to the claimant the sum of $54,575.50 into a LIRA in her name.
[32] The claimant will have her costs and disbursements after their assessment in accordance with Schedule B of the Supreme Court Family Rules, B.C. Reg. 169/2009.
