Originally published in Blakes Bulletin on Pension & Employee Benefits, October
DIVISION OF PENSIONS
The valuation and division of pension entitlements on marriage
breakdown is a complex issue for members and administrators of
defined benefit pension plans in Ontario. Pensions are considered
family property for equalization purposes under the Family Law
Act (Ontario) (FLA). As a result, upon marriage breakdown, a
pension must be valued in order to determine the separating
spouses' net family property. In addition, where the member
spouse's net family property exceeds that of the non-member
spouse, the member spouse may want (or need) to use his or her
pension to satisfy the non-member spouse's right to
equalization of net family property. However, any transfer of
pension entitlements to the non-member spouse will be subject to
the Pension Benefits Act (Ontario) (PBA), which limits the
portion of a member's pension that can be assigned to a
non-member spouse on account of equalization to 50% of the pension
benefits accrued during the marriage.
The Law Commission of Ontario (the LCO) issued a consultation
paper on the division of pensions on marriage breakdown in May 2008
and received numerous submissions in response to the consultation
paper. In a September 29, 2008 report, released to the
public on October 6, 2008, the LCO set out its recommendations (or
decision not to provide a recommendation in one instance) with
respect to nine issues:
inclusion of pensions in "family property"
for equalization purposes;
valuation of rights under defined benefit pension plans for
settlements involving defined benefit pension
settlements involving defined contribution pension
establishment of a government fund to hold pension entitlements
of non-member spouses acquired through settlement of equalization
the fifty per cent rule under the PBA noted above;
Canada Pension Plan credits;
double dipping, i.e., using pension plan entitlements to
satisfy equalization claims and claims for support; and
division of pensions on breakdown of common-law
Of particular interest to plan administrators are the
LCO's recommendations that are aimed at standardizing
Specifically, the LCO recommends that, subject to certain
limited exceptions, settlement of an equalization claim requiring
payment of pension benefits under a defined benefit plan to the
non-member spouse should utilize the "immediate settlement
method" (ISM) which, in general terms, is a settlement
method that involves an immediate valuation of the non-member
spouse's share of the member's pension and an
immediate transfer of the commuted value of the non-member
spouse's share of the member's pension from the
plan. The LCO further recommends that the "deferred
settlement method" (DSM) be available at the election of
the member and non-member spouse if the member is within 10 years
of his or her normal retirement date under the plan and that the
DSM be available where the member is more than 10 years away from
his or her normal retirement date under the plan if the member, the
non-member spouse and the administrator of the pension plan all
agree. The DSM is generally more complex to administer as it
results in the actual settlement of the non-spouse's share
of the member's pension at a future date, often well after
the parties' separation. The LCO recommends with respect to
defined contribution plans that only the ISM method be available to
settle a non-member spouse's claim to a share of a
member's pension entitlement.
The full LCO report on the division of pensions on marriage
breakdown, of which the recommendations identified above form part,
is expected to be released later this year.
On October 9, 2008, the Supreme Court of Canada denied leave to
appeal the decision of the Ontario Court of Appeal in Wronko v.
Western Inventory Service Ltd. (Wronko). The Ontario
Court of Appeal had held that an employer could not unilaterally
amend a fundamental term of an employment contract to the detriment
of the employee, even upon substantial notice. The Court of
Appeal's decision in Wronko is discussed in more
detail in our May 2008 Blakes Bulletin on Pension &
Employee Benefits – Important Ontario Court of Appeal
Decision Dealing with Unilateral Changes to the Terms of
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Emotional culture is influenced in great part by the mindset and actions of leadership, although employees also play more of a role than they may realize in creating the culture that exists in the group.
The session will be led by Dr. Robert Brooks, an award-winning author and psychologist. In his presentation, Dr. Brooks will describe the mindset and realistic practices of leaders and staff that help to nurture and sustain a culture characterized by positive emotions, satisfying, respectful relationships, a sense of meaning and ownership for one’s work, and enhanced job performance. Examples will be offered to illustrate strategies for developing a positive emotional culture in an organization.
Join leading lawyers from the Blakes Pensions, Benefits & Executive Compensation group as they discuss recent updates and legal developments in pension and employee benefits law as well as strategies to identify and minimize common risks.
Ready? The company wants its in-house lawyers to be on the front lines, but there is little to no training around how to “look for risk,” let alone how to evaluate it or report it. Our special guest, Sterling Miller, will present simple ideas and processes you can use to spot and identify risk, and demonstrate how to evaluate and manage that risk alongside the business.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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