HOW TO READ MY STATEMENT OF FAMILY LAW VALUE FOR ACTIVE MEMBERS Your Statement of Family Law Value is an important document that provides you with the value of the pension assets you accumulated during your spousal relationship, using calculations that are prescribed by the Ontario Pension Benefits Act. HOOPP sends you and your former spouse a Statement of Family Law Valuation (FSCO Form 4B), once you complete and send your Application for Family Law Value (FSCO Form 1) to HOOPP, along with all the necessary supporting documentation. Here are some guidelines to help you read and understand your Statement of Family Law Value. Please note: These guidelines are only for members who were active members of the Plan on the date they separated from their former spouse. If you are not an active member of HOOPP and need help understanding how to read your statement, please contact HOOPP Client Service. NOVEMBER 2013 1
STATEMENT SECTIONS EXPLAINED Part A: Family Law Value 1. 2. 3. 4. 1. The start date of the spousal relationship 2. The Family Law Valuation Date (separation date) 3. The Family Law Value, which represents the total pension benefit that was accrued by the plan member during the spousal relationship 4. By law, the maximum amount that HOOPP can be directed to pay a former spouse is 50% of the total family law value NOVEMBER 2013 2
Parts B D: Information Pertaining to the Member, Spouse and Pension Plan These sections contain details on the contact information for you and your former spouse, which you have provided to HOOPP. If any information is incorrect, it is important that you contact HOOPP Client Service Monday to Friday, 8 am to 5 pm Eastern Standard Time at 416-646-6445 or 1-877-43HOOPP (46677) (Canada and U.S.). Part E: Transfer Options for the Former Spouse of the Plan Member The top two payment options on Part E are the only payment options available to your former spouse from HOOPP in the event that you choose to divide your pension. Appendix A: Plan Membership, Employment and Additional Voluntary Contribution Information as of the Family Law Valuation Date This section provides all the employment and pension-related information that was used in the family law valuation including but not limited to: plan membership and employment information as of the family law valuation date (separation date) total contributory service accrued during plan membership and spousal relationship period pensionable annualized earnings additional voluntary contributions Appendix B: Explanation of Pension Plan Provisions that Apply to the Plan Member as of the Family Law Valuation Date This section outlines provisions of HOOPP in effect at the Family Law Valuation Date, including but not limited to: early retirement benefits death benefits bridge benefits cost of living increases (indexation) NOVEMBER 2013 3
FAMILY LAW VALUE CALCULATIONS Example: Family law valuation and division Please note that this example is for illustrative purposes and should not be relied upon for decision-making purposes. Kim began her spousal relationship with Jonathan on October 5, 1985. On January 1, 1992 Kim joined HOOPP. On February 23, 2010, Kim separated from Jonathan at the age of 48 years and 3 months. At the time Kim separated from her spouse, she had been a member of HOOPP for 18.22 years and her annual salary was $55,000.00. What does this mean for Kim at the family law valuation date or separation date? Kim s preliminary value of $186,598.59 was calculated using the total value of the pension she accrued during the period she was a member of HOOPP and in a spousal relationship with Jonathan. This value is then split in half to determine the maximum value that Jonathan may receive. The maximum value that Jonathan would be entitled to would be $93,299.30. Preliminary Value (G) (G) $186,598.59 $186,598.59 Family Law Value Total Total contributory contributory service service accrued accrued by the by plan the member plan from member date of from enrolment date of to enrolment Family Law to Valuation Family Law Date Valuation (J) Date 18.22(J) 18.22 x = x Maximum Transfer Value Family Law Value $186,598.59 50% Total contributory service accrued by the plan member during the spousal relationship (H) 18.22 Maximum amount assigned and transferred to the former spouse. $93,299.30 Preliminary Value The Preliminary Value is the total value of the pension that was accrued by the plan member during the period of his or her plan membership up to the Family Law Valuation Date (end date of the relationship). Division of pension assets Kim and Jonathan proceed with the division of pension assets and agree that Jonathan will receive $93,299.30 from Kim s pension (the maximum amount allowed). This means that Jonathan would get $93,299.30 as a lump sum amount from HOOPP. How does this impact Kim s pension when she retires? Kim retires at age 60 with an unreduced pension Contributory years at that time = 30 years Average Annualized Earnings at time of retirement = $79,853.00 Projected increases used 3.25% 4.25% Average YMPE at retirement = $63,773.00 As Kim continues to work and contribute to HOOPP for another 10+ years, she accrues more contributory service that is used to calculate her final benefit entitlement. At retirement without the division At retirement with the division Monthly Pension $3,194.59 $2,612.78 Bridge Benefit $796.94 $646.22 After her family law division, it is estimated that at the age of 60 Kim would receive a monthly pension of $2,612.78 with a bridge benefit payable until age 65 of $646.22. The Family Law Value is determined by using three factors: 1. the Preliminary Value ( G ) 2. total credited service accrued by plan member during the spousal relationship, from the relationship start date to the Family Law Valuation Date ( H ) 3. total credited service accrued by plan member from date of enrolment to Family Law Valuation Date ( J ) NOVEMBER 2013 4
STEP 1 CALCULATION OF PRELIMINARY VALUE AS OF THE FAMILY LAW VALUATION DATE ** STEP 2 CALCULATION OF FAMILY LAW VALUE AS OF THE FAMILY LAW VALUE DATE NOVEMBER 2013 5
STEP 3 MAXIMUM AMOUNT THAT MAY BE ASSIGNED AND TRANSFERRED TO THE FORMER SPOUSE This is the maximum amount of your pension that may be assigned and transferred to your former spouse as of the Family Law Valuation Date (50%). Please note: This does not mean your former spouse will get the Family Law Value amount as directed in the legal document pertaining to the split of pension assets. In accordance with the Ontario Pension Benefits Act, HOOPP cannot pay a former spouse more than 50% of the Family Law Value of the pension benefits accrued during the spousal relationship and therefore, this amount represents the maximum that HOOPP can pay your former spouse. In the event your pension is to be divided, the amount your former spouse will receive must be addressed in a court order, domestic contract (i.e. separation agreement) or family arbitration award but this amount cannot exceed the maximum 50% as reported on your Form 4. For more information about the maximum transfer amount, please refer to the Family Law FAQs on the FSCO website. NOVEMBER 2013 6