Pension Division in Alberta Divorce: Complete 2026 Guide
Understanding how pensions are valued and divided in Alberta divorce proceedings.
1. Pensions as Matrimonial Property
Under Alberta's Matrimonial Property Act, pension benefits earned during the marriage are considered matrimonial property subject to division. This includes:
- Employer-sponsored pension plans
- Government employee pensions (federal, provincial, municipal)
- LAPP (Local Authorities Pension Plan)
- Teachers' Pension Plan
- PSPP (Public Service Pension Plan)
- Military pensions
Key Point:
Only the portion earned during the marriage is subject to division. Pre-marriage and post-separation pension growth typically belongs to the member spouse.
2. Types of Pensions
Defined Benefit Plans
The pension amount is calculated based on a formula (usually years of service x percentage x final salary). The employer bears the investment risk.
Examples: LAPP, PSPP, Teachers' Pension Plan
Defined Contribution Plans
Both employer and employee contribute to an account that is invested. The final pension depends on investment performance. The employee bears the investment risk.
Division: Usually straightforward - divide the account balance for the marriage period.
Hybrid Plans
Combine elements of both defined benefit and defined contribution plans.
3. Pension Valuation
Getting a Pension Statement
Request a Statement of Family Law Value from the pension administrator. This shows:
- Total pension value
- Value attributable to the marriage period
- Commuted value (for defined benefit plans)
- Transfer options available
Valuation Date
In Alberta, the default valuation date is the date of trial, but parties can agree to use:
- Date of separation
- Date of agreement
- Another agreed date
Actuarial Valuations
For defined benefit plans, an actuarial valuation may be needed to determine the present value of future pension benefits. This involves complex calculations considering:
- Expected retirement age
- Life expectancy
- Interest rates
- Plan provisions (indexing, survivor benefits)
4. Division Options
Option 1: Transfer to LIRA
The non-member spouse's share is transferred to a Locked-In Retirement Account (LIRA). The funds remain locked until retirement age.
Option 2: Pension Sharing at Retirement
The pension remains whole until the member retires, then payments are split between the spouses according to the division.
Option 3: Offset with Other Assets
The member keeps the entire pension but gives the other spouse equivalent value in other assets (home equity, investments, etc.).
Tax Consideration:
Transfers to a LIRA pursuant to a separation agreement or court order are tax-deferred. The non-member spouse pays tax when they eventually withdraw the funds.
5. CPP Credit Splitting
Canada Pension Plan (CPP) credits earned during the marriage can be divided equally. This is separate from other pension division.
How CPP Splitting Works
- Credits earned during cohabitation are divided equally
- Applied for through Service Canada
- Mandatory upon request after divorce (cannot be refused)
- Can only be waived in a valid written agreement
Impact on Benefits
Credit splitting affects each spouse's:
- Retirement pension amount
- Disability pension (if applicable)
- Survivor pension for future spouses
6. Frequently Asked Questions
Need Help With Pension Division?
Pension division is one of the most complex aspects of divorce. We work with actuaries and financial experts to ensure fair valuations and proper division.