It makes me really angry, that Service Canada's answer to this question seems to generally be "Yes", without telling you the whole story.
Here's a copy & paste from the legislation, so you can read the truth:
[B]"When mandatory division to take place
55.1 (1) Subject to this section and sections 55.2 and 55.3, a division of unadjusted pensionable
earnings shall take place in the following circumstances:
(a) in the case of spouses, following a judgment granting a divorce or a judgment of
nullity of the marriage, on the Minister’s being informed of the judgment and receiving
the prescribed information;"[/B]
As you can see, it's really only mandatory once someone informs CPP about the divorce (ie, someone must complete a form, that in most people's mind would equate to an application for a credit split) and provides all of the necessary information (dates of marriage, separation, divorce etc, as well as whether there's any applicable separation agreement that might prevent a credit split).
The only thing that's truly mandatory, is that Service Canada has to process such an "application" once it has been received, and it can't be undone once it's done (except in one specific case where both parties are receiving their CPP at the time of the credit split, and both of their pensions decrease as a result of the credit split).
I had a client today, who had been told that a credit split was mandatory when she applied for her CPP retirement pension in 2012. She wasn't told that the "mandatory" only started once she completed the "application" for a credit split. She also wasn't told that as a result of the credit split and because she was eligible for the child-rearing provision (CRP), the amount of any decrease to her ex-husband's CPP might be significantly more than any resulting increase in her CPP.
She wasn't too happy when I told her today, that the credit split only increased her CPP by $23.78 monthly, and it decreased her ex-husband's by potentially as much as $184.70 (I don't have access to his full CPP record of earnings now, so it could be less if he doesn't have any/many other years of low earnings).
Wouldn't it be nice if Service Canada had told her of this potential impact, and allowed her and her ex-husband to negotiate some other arrangement that might have had them each better off by approx $80 monthly, indexed, for life!
Here's a copy & paste from the legislation, so you can read the truth:
[B]"When mandatory division to take place
55.1 (1) Subject to this section and sections 55.2 and 55.3, a division of unadjusted pensionable
earnings shall take place in the following circumstances:
(a) in the case of spouses, following a judgment granting a divorce or a judgment of
nullity of the marriage, on the Minister’s being informed of the judgment and receiving
the prescribed information;"[/B]
As you can see, it's really only mandatory once someone informs CPP about the divorce (ie, someone must complete a form, that in most people's mind would equate to an application for a credit split) and provides all of the necessary information (dates of marriage, separation, divorce etc, as well as whether there's any applicable separation agreement that might prevent a credit split).
The only thing that's truly mandatory, is that Service Canada has to process such an "application" once it has been received, and it can't be undone once it's done (except in one specific case where both parties are receiving their CPP at the time of the credit split, and both of their pensions decrease as a result of the credit split).
I had a client today, who had been told that a credit split was mandatory when she applied for her CPP retirement pension in 2012. She wasn't told that the "mandatory" only started once she completed the "application" for a credit split. She also wasn't told that as a result of the credit split and because she was eligible for the child-rearing provision (CRP), the amount of any decrease to her ex-husband's CPP might be significantly more than any resulting increase in her CPP.
She wasn't too happy when I told her today, that the credit split only increased her CPP by $23.78 monthly, and it decreased her ex-husband's by potentially as much as $184.70 (I don't have access to his full CPP record of earnings now, so it could be less if he doesn't have any/many other years of low earnings).
Wouldn't it be nice if Service Canada had told her of this potential impact, and allowed her and her ex-husband to negotiate some other arrangement that might have had them each better off by approx $80 monthly, indexed, for life!