Divorce and the division of Canada Pension Plan credits

This study investigates the low take-up rate of the division of Canada Pension Plan credits at separation and divorce. The equal division of CPP credits accrued during marriage is mandatory when CPP authorities receive notification of the dissolution, yet only 15% of couples apply for credit-splitting. The equalization of CPP credits generally yields a transfer from the male to female partner, because women are more likely than men are to earn lower wages and experience family-related interruption in their labour force participation. Low public awareness, misinformation, provincially legislated waivers, and reluctance to make retroactive claims are identified as reasons for the low utilization of credit-splitting. Policy recommendations to improve take-up and outcomes for the low contributing partner include the inclusion of CPP credit-splitting information on the CPP retirement application, the elimination of provincial legislation that permits the waiver of claims for CPP credit-splits, and a targeted communication strategy.