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Alberta Pensions

Divorce equalization often includes dividing a spouse's pension. There are laws that dictate the amount that can be transfered. There are also laws that dictate where you can move it.

There are two kinds of pensions. Defined benefit plans are managed and controled by a third party pension manager. The pensions are sometimes underfunded meaning there is not the amount of money needed to pay all the pension obligations.

This is what happened to Nortel. These pensions pay the retiree a set monthly payment ( based on income)and then, depending on the pension option chosen may pay a spouse a pension in the event of the plan members death.

Defined contribution pensions are just like an RSP. The difference is the participant is responsible for the investment choices and all the risk of growth within the plan.

Both plans have the same rule if an x-spouse is entilted by way of Separation Agreement, court order, etc If you decide to move the pension so you are in control, then it has to be moved to a Locked in RSP. That means there are another set of rules.

Working with a knowledgable and trusted financial professional is key, to ensure you not only understand but it is set up properly and makes sense for you going forward.

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