Law Times

Law Times • June 21, 2010 Lawyers await details on pension division reforms BY ROBERT TODD Law Times division reforms into play, family law practitioners recently received a primer on what to expect when the changes take hold. The often-confusing system A for the division of pensions upon divorce has long been a point of contention within the family law bar. The difficulties prompted the Law Commis- sion of Ontario to release a set of recommendations for reform in 2008, which in part led to the government's introduction of Bill 133, the Family Statute Law Amendment Act. Within the leg- s Ontarians await the creation of regulations necessary to put pension As well, the valuation will be based on a formula to be es- tablished by regulation under the Pension Benefits Act. The Ministry of Finance must now create those rules. In terms of equalization, islation are provi- sions that aim to settle some of the main problems that have tradition- ally cropped up when couples split and pensions are among net family property. One of the issues has been the imbalance in many situations be- tween pension entitlement and a person's ability to comply with an equalization payment. This prob- lem may arise when an individual has a highly valued pension plan but won't receive it until retire- ment. That disconnect has forced some people to sell assets or take on loans to make court-ordered equalization payments. Some divorcing couples have tried to manage this prob- lem by agreeing to deal with pension division separately, once the money is paid out. But that, too, comes with com- plications, including the need for people to keep an eye on their ex-spouse's entitlements. It also precludes a clean break for spouses who may not want to communicate after divorce. As John Gregory, general counsel at the Ministry of the Attorney General's policy divi- sion, noted at the Law Society of Upper Canada's recent fam- ily law summit, Bill 133 offers some key fixes for these and other problems. The legislation makes two significant changes in relation to pension valuation, said Gregory, who pointed out that the chang- es relate only to defined-benefit plans rather than defined-con- tribution plans. The pension entitlement valuation will now be conducted by the plan ad- ministrator, a change from the current practice of having an ac- tuary make that determination. That will allow the administra- tor, who may have to pay out an amount from the plan to the non-member spouse, to set the value more accurately. You certainly wouldn't want your client discovering after you've settled that Bill 133 is out there and taking the view that they had no idea that was an option. Gregory noted the new crite- ria courts will use to determine whether to mandate the transfer of funds from a pension plan to meet equalization require- ments and how much should be ordered. The nature of the assets available to each spouse at the time of the hearing; the proportion of spouses' net fam- ily property that consists of the imputed value of their interest in the pension plan; and the liquid- ity of the lump sum in the hands of the spouse to whom it would be transferred are among the factors courts will con- sider, according to Gregory. While it's un- clear just when the new pension divi- sion rules will come into force, lawyer Barbara Thomp- son of Thompson Summers in Ot- tawa noted some key consider- ations during the transition pe- riod. For example, Bill 133 will affect couples who separated be- fore the date the new legislation takes effect. That means that if a matter has been resolved through an agreement or order, both the Family Law Act and the Pension Benefits Act will generally prevent parties from going back to obtain another order. At the same time, Thomp- son urged lawyers to inform clients that Bill 133 is on the horizon. She has gone as far as putting in writing for clients what is and isn't known about the new legislation. From there, she's seeking clients' direction on how to proceed. "You certainly wouldn't want your client discovering after you've settled that Bill 133 is out there and taking the view that they had no idea that was an option," she said. Meanwhile, Gregory encour- ages lawyers to keep an eye out for the Ministry of Finance's regulations, which will be post- ed on the province's regulatory registry at ontariocanada.com/ registry. However, he doesn't expect the regulations, which must go through a public con- sultation process once posted, to be finalized this year. "I think the chances of it coming into force in calen- dar 2010 are just about nil at this point," said Gregory. He added, however, that Finance Minister Dwight Duncan has committed to conducting con- sultations on the regulations this year. LT Untitled-1 1www.lawtimesnews.com For Child and spousal support calculations, cash fl ows and more... Features Include: Redesigned Printout: A concise, easy-to-understand one page printout. New "Search" feature: Find particular input items quickly and easily. New input: Easier to understand and better organized. What you see is what you print. More fl exibility: Handle complicated scenarios with the use of overrides. Improved "Help" menu: Minimize input errors and uncertainty. Simplifi ed Emailing: Convert calculations to PDF with one click - ready to email. COMING SOON: B.C. Supreme Court Forms DIVORCEmate One...From Marriage Contracts to Divorce Judgments and Everything in Between. a product of Toll Free: 1-800-653-0925 or 416-718-3461 x446 e: sales@divorcemate.com www.divorcemate.com 6/15/10 11:50:59 AM FOCUS ANNOUNCEMENT PAGE 15 Valois Ambrosino joins Gardiner Roberts as Chair of the Family Law Group. Mr. Ambrosino has acted as counsel in proceedings before the Ontario courts at all levels and has extensive experience representing clients in a number of high confl ict matters involving custody and parental access as well as matters concerning complex support and property claims. Mr. Ambrosino is a member of the Law Society of Upper Canada, the Canadian Bar Association (Ontario), the Toronto Lawyers Association, the York Region Law Association, the Peel Law Association, and the Canadian Italian Advocates' Organization. He contributes regularly to various publications focusing on both business and family law. Mr. Ambrosino earned his LL.B. from Osgoode Hall Law School in 1994 and has practiced in Ontario since 1996. GardinerRoberts_LT_June21_10.indd 1 6/15/10 9:49:39 AM TOOLS 2K 10 "NEW" Redesigned, Restructured, Reorganized…REMARKABLE!

• Cover
• Charter Rights
• Dodging A Bullet
• Focus On Family Law