Accrued Pension
For service up to any date, such as valuation date, this is the amount of pension payable in the form of a monthly annuity commencing at retirement, in other words, It is the amount of the first monthly pension payment upon retirement excluding and taxes.
Actuary
A person whose work is to calculate statistically risks, premiums, and life expectancies for insurance and person plans.
Adversarial System
Canada's court system is designed to resolve disputes between two opposite's parties. The parties present their respective sides of an issue through evidence judge acts as an imperial arbiter, weighing the evidence and deciding how the law applies in each specific case.
Alternate Dispute Resolution
(ADR): ways for parties to resolve their differences without a trial. Methods include negotiation, mediation, arbitration and collaborative law.
Application
A court proceeding starts with the filing of certain documents with the court officers and the serving of copies of these documents on the person affected. Details of the material to be included in the application, the document format, and the filing fees are determined by provincial and the territorial rules of court procedure.
Appraisal
A procedure for determining the fair market value of an asset when it is to sold or divided as part of the divorce process.
Arbitration
Submitting a disputed matter for decision to a person who is not a judge. The decision of an arbitrator is usually binding and final. Arbitration varies greatly from mediation.
Assets
Cash, property, investment, goodwill and other items of value (as defined by law) that appears in a balance sheet indicating the net worth of an individual or business.
Beneficiary
In a pension plan, a person who, on the death of a plan member or pensioner, may become entitled to a benefit under the plan.
Benefit Formula
Provision in a person plan for calculating a member's defined benefit according to years of service and earnings(career or final average), a fixed dollar amount, or flat amount
Bridging Benefit
A temporary benefit designed to supplement the pension income of employees who retire before age sixty-five, when government benefits (OAS and CPP) become available.
Certificate of Divorce
The order that terminates a marriage. It is irrevocable, and it granted after a waiting period of 31 days from the date of the divorce judgment.
Child Support
The amount of money paid by a non-custodial parent to the custodial parent for a child's day to day expenses and other special needs. There are federal and provincial written child support guidelines and enforcements procedures
Child Support Guidelines
A series of mathematical formulae that calculate the amount of child support to be paid.
Collaborative Divorce
A team approach to divorce. Divorcing families obtain professional help from specialists in the psychotherapy, financial and legal fields and, when needed, medical and child specialist to help them settle their case.
Collaborative Law
A new dispute resolution model in which each party retains a lawyer who has gone through specialized "Collaborative Law" training. Both lawyers' only jobs is to help settle the dispute. All parties agree to work together respectfully, honestly and in good faith to try to find "win-win" solution to the legitimate needs of the divorcing couple No one may go to court, or even threaten to do so. If that should occur, the Collaborative law process terminates and both lawyers are disqualified from any further involvement in the case.
Common Law Spouse
Almost all the provinces recognize that some mew and women live together without getting married. While the precise defined varies from province to province it means achieving the status of a spouse for some legal purpose, such as support.
Commuted Value
The amount of an immediate lump sum that is estimated to be equal in value to a series of future payments. It is the same as a transfer value- the actuarial present of the benefits to which an employee or spouse is or will be entitled- but is rarely the correct value for equalization on a marriage breakdown.
Court Order
A written instruction from the court carrying the weight of law. Orders must be in written anyone who knowingly violates a court order can be held in contempt of court.
Credited Service
The length of service used in a plain formula to calculate a defined benefit
Custodial Parent
The parent with whom the child/children live the majority of the time. A distinction should be made between a legal guardian (who has the ability to make legal decisions on behalf of the child) and the custodial parent. technically, a legal guardian may have no custody rights.
Custody
Usually refers to the parent's right to (1) have a child live with that parent and (2) make decisions concerning the child. The court may award custody to one parent, which is called SOLE CUSTODY, or grant JOINT CUSTODY, allowing both parents the right to physical care, control or direct physical supervision of the children.
Death Benefit
A lump sum (usually), or a life annuity payable from a pension plan to the beneficiary or estate of a member who dies before (or in some case, after) retirement.
Debt
Services, money or goods owned by one party to another.
Defined Benefit Plan
A distinct benefit a Company pension participation member will receive upon retirement, the value of which is at least equal to the member's accumulated contribution with interest.
Defined Contribution Plan
Plan sponsor contributions are defined, usually as a percentage of earnings, and usually include specific contribution to be made by the plan member. (1) at retirement, these contributions plus interest are used to purchase an annuity for former members
Division of Pension Credits
Also known as credit splitting. A provision in pension plans or pension legislation whereby one spouse, on dissolution of marriage, may obtain a share of pension credits earned by the other partner during the period of marriage or thereafter.
Divorce
The termination of the legal relationship of marriage between husband and wife.
Equalization Payment
An amount paid by the spouse with the higher net worth to the spouse with the lower net worth. The amount of the equalization payment is one half of the difference between the net worth of the husband and the wife.
Excluded Property
The value of property owned on the valuation date, other than a matrimonial home, that was acquired by gift or inheritance from a third person after the date of marriage.
Grounds for Divorce
Marriage breakdown is the sole ground for legally ending a marriage under the terms of the Divorce Act. Marriage breakdown can be established in three ways: through evidence that one spouse committed adultery; through evidence of physical or mental cruelty, or through evidence that the spouses intentionally lived separate and apart for at least one year.
Indexing
(1) To adjust (wages, interest rates) automatically to changes in the cost of living (inflation). (2) A number used to measure changes in prices, rates or employment, showing percentage variation from an arbitrary standard (usually 100) representing the status at some earlier time.
Interest-Based Bargaining
A method of negotiation used in mediation. It starts with each party educating the other party about their interest. Ideally, the parties will work together until they find solutions that allow both of them to meet their needs.
Joint Custody
The children live with the residential custodian and visit with the non-residential parent. Both parents have an equal say in major decisions affecting the children and decisions can only be made with notice and consent. See also Sole Custody.
Litigation
The process by which a civil case settles parties' rights.
Matrimonial Home
The dwelling where the family or legally married couple have resided. Common-law spouses do not have a matrimonial home (as recognized in law) because they have no statutory property rights. Note that it is possible to have more than one matrimonial home at a time.
Mediation
A process by which people in situations of potential conflict attempt to resolve their difference and reach a mutually acceptable agreement. Neutral third parties – mediators – can often help the parties retain a focus on the problems to be solved and possible solutions, rather than on areas of personal disagreement.
Mortality Tables
Since a pension pays a benefit from retirement age to the death of the plan member, a mortality table is required to calculate its value. Mortality tables begin by measuring the probability of a person of any age living one more year, after which the calculation becomes quite complex. The two types of tables are: (a) life tables for Canada, developed by Statistics Canada from census date, which show mortality rates for the general population; and (b) Group Annuity Mortality Statistics (GAMS), developed from policyholder data provided by Canadian and American life insurance companies. Members of the Canadian Institute of Actuaries are required to use GAMS in their pension valuations.
Pension
A fixed sum paid regularly to a person or surviving dependant following retirement. There are both public (Canada Pension Plan) and private (from one's employer) pensions. Some provinces consider a pension that is not yet being paid at the time of a marriage breakdown to be property that must be divided.
Separation Agreement
The domestic contract listing provisions for peace between separating and divorcing couples, including division of property, spousal support, and responsibility for children of the marriage. The couple's agreement or court-ordered terms can be made part of the divorce order.
Spousal Support
Money paid by one partner to the other for the recipient's support following separation or divorce. Support may be paid for a specific period of time (long-term or short-term) and is based on the needs of the recipient, the payor spouse's ability to pay, and economic differences between the partners.
Standard of Living
A factor when determining spousal support, allowing the recipient an adequate amount to maintain his or her current lifestyle.
Statement of Financial Information
A court document in which parties set out all sources of income and list all of their expenses. It is used to determine spousal support and identify cash flow issues. Like other court documents, it is made under oath.
Statement of Net Family Property
A court document in which parties set out the value of their assets and liabilities, list property owned prior to marriage and list property received as a gift or inheritance from a third party. Values are provided for the date of marriage, valuation date, and the date of the statement. The information provided is used to calculate the equalization payment.
Survivor Pension or Survivor Pension Benefit
A monthly benefit payable under a pension to the surviving spouse of a deceased employee or pensioner; usually a benefit other than benefits under the guaranteed annuity or joint survivor annuity provision.
Valuation Date
The earliest of (a) the date that spouses separate with no reasonable prospect of reconciliation, (b) the date that a divorce is granted, (c) the date that a marriage is declared a nullity, as outlined by the Family Law Act. In Ontario courts of law, the valuation date usually is considered to be the date of separation
This article is made available to you from Women in Divorce Financial.
Eva Sachs is the founder of Women in Divorce Financial. She is a Certified Divorce Financial Analyst (CDFA™), has her CFP™ designation and is a member of the Institute for Divorce Financial Analysts.
She can be reached at esachs@womenindivorcefinancial.ca or by visiting www.womenindivorcefinancial.ca.