In Ontario, property division post-divorce is governed by the Family Law Act, which mandates the “equalization of net family property.” Your Toronto divorce lawyer is very familiar with this concept. For more details, please read “Distribution of Property in Ontario: The Basics.” It is apt to remember, the property division laws are only applicable to persons who are or were once spouses, pursuant to the definition provided in section 1.
Property, as outlined in section 4, “means any interest, present or future, vested or contingent, in real or personal property.” Pensions have been traditionally included in the net family property. However, Toronto divorce lawyers have repeatedly witnessed and mitigated the difficulties that come with the valuation and division of pensions. In particular, spouses were often required to hire an actuary to assess the plan’s value.
In response, legislative changes to the Act and the Pension Benefits Act have been made, effective January 1, 2012. The objective of the above-mentioned amendments are to make the valuation and division of pension assets easier and more efficient. In addition, the amendments will reduce lengthy court proceedings and reduce conflicts. While the division of marital pension property has become easier, it is still recommended that you consult with a Toronto divorce lawyer before proceeding.
As of the commencement date, pension plan members will be able to make payments to his or her former spouse from the plan itself. Under the new rules, the pension plan member has the option to make an immediate lump-sum payment. The older methods are also available such as a percentage of monthly pension benefits when they become payable, or a negotiated settlement. It is advisable to discuss the advantages and disadvantages of all your options under the new regime with a Toronto divorce lawyer.
A pension plan administrator will determine the monetary value of payment based on a prescribed formula; so hiring an actuary may not be necessary. The assessment and settlement of pension plans will be prompt, cost-efficient, and consistent.
These new rules only apply to married spouses in Ontario where one spouse is a member of a provincial pension plan. If one is a member of a nationwide plan, the value of the pension will be calculated by the actuarial method that was previously employed prior to January 1, 2012.
There are also time constraints to be considered. The changes will only be applicable to spouses who have separated on or after January 1, 2012; or to spouses who separated before that date, but have not yet come to a property settlement. Unmarried spouses may also benefit from the legislative changes if they have mutually agreed to share the value of the pension upon separation.
For further information on the valuation, division and settlement of provincial pensions; and the qualifying criteria of the legislative changes to the Act and Pension Benefits Act, contact a Toronto divorce lawyer. Pensions remain a source of contention in many separations. It is preferable to have an experienced and knowledge Toronto divorce lawyer on your side to ensure fair and equitable outcomes.
