skip to Main Content

COVID-19 Statement

As Covid-19 continues to affect everyday life in Ontario, our firm remains open for business. In order to combat the spread of this virus, we are working remotely. We are temporarily not meeting with clients in person but our lawyers are working offsite; we are using telephone and other electronic means to work with our clients and to conduct initial consultations. Even though the courts are closed to all but urgent matters, we continue to do everything we can do to advance cases and obtain the best results that we can for our clients.

If you are in need of assistance, we are here to help. Please contact us.

How Recent Amendments Have Changed the Division of Pensions in Ontario

Pension Division

In 2012, the Ontario Government amended the Pension Benefits Act and the Family Law Act with regard to the division of pension assets on the breakdown of a spousal relationship. Prior to these amendments, dividing a pension could be complicated and in certain circumstances, could result in a huge equalization payment being owed without the ability to divide the pension to satisfy that equalization payment (in other words, the spouse with the pension would have to use other funds to pay the equalization payment). The amendments attempt to simplify the process and make is easier for couples to value and divide their pension assets following a separation.

What are the changes?
The main changes relate to who values the pension assets, how they are valued, and how they can be divided. Under the new amendments, the valuation of pension assets is calculated by the plan administrator, in accordance with formulas set out in the legislation. The plan administrator provides a single family law value. Prior to this, valuations were usually completed by private actuaries and the valuations involved a range of values. In addition, under the new amendments, at-source division is much easier. Former spouses of plan members can choose to receive an immediate payment of their share of the pension assets, either as a lump sum transfer or a division of monthly pension payments.

Who do the changes apply to?
The new rules apply to married spouses in Ontario, where one of the spouses is a member of an Ontario pension plan, if they separated on or after January 1, 2012, or before January 1, 2012, if they have not already divided their property.
The new rules also apply to unmarried spouses if they agree to share the value of the pension plan following separation.
Members of other plans (i.e. federally registered plans or foreign pension plans) have to retain a private actuary to determine the value of their pension in accordance with the legislation.

What is the Step-by-step Process?
1. The pension is valued:
• For Ontario pension plans, the plan member and their spouse must complete the appropriate FSCO forms and submit those to their plan administrator to have the valuation completed. In most cases, the plan administrator charges a fee to provide the calculations (up to $600 plus HST). The required forms can be found on the Financial Services Commission of Ontario website.
• For other pension plans, the plan member and their spouse must retain a private actuary to complete the valuation in accordance with the new rules.

2. The value of the pension is inserted into the Net Family Property Statement.

3. The equalization payment is determined.
• For Ontario regulated plans, the pension member can request a division/transfer of pension to assist in equalization. It is important to note that the division of the pension is optional. The pension member can also choose to pay their equalization payment using other assets or funds. When the plan administrator provides the family law value to the plan member/spouse, they will provide forms and instructions on how to request a division of the pension.

If you or your spouse have a pension, it is important that you speak to an experienced family law lawyer about how these new rules may apply to your matter and what steps you need to take to determine the family law value of the pension. The talented lawyers at Radley Family Law can help.

Back To Top