Family Law related FAQs - Transitional Rules

 
 
Q1200. Who do the new pension valuation and division rules apply to?
 
A1200.  To divide pension assets, spouses whose relationship has broken down need to obtain a Settlement Instrument (court order, family arbitration award, or domestic contract) providing for the division.
 
All spouses whose relationship breaks down and whose Settlement Instrument is made on or after January 1, 2012, are subject to the new pension valuation and division rules.
 
Spouses whose Settlement Instrument was made before January 1, 2012 are subject to the old pension valuation and division rules unless their Settlement Instrument did not deal with the pension assets.
 
For example:
 
The parties separated in 2009. The pension assets were valued by an independent actuary. The parties have a Settlement Instrument made in December of 2011 that dealt with everything including division of the pension assets. The parties are subject to the old rules.
 
The parties separated in 2009. The pension assets were valued by an independent actuary. The parties were unable to settle and a court date could not be obtained until January 2012. The parties are subject to the new rules. [Note: This means that the parties must apply for a Family Law Value from the plan administrator before the pension assets can be divided pursuant to the court order (or another Settlement Instrument).]       -03/2012
 
 
Q1201. Can we change our Settlement Instrument (court order, family arbitration award or domestic contract) so that the new pension valuation and division rules apply to us?
 
A1201.  If your Settlement Instrument did not deal with the pension assets, it can be changed to fall under the new pension valuation and division rules.
 
If your Settlement Instrument dealt with the pension assets, it cannot be changed. -03/2012
 
 
Q1202. What does “dealt with the pension assets” mean?
 
A1202. “Dealt with the pension assets” means your Settlement Instrument (court order, family arbitration award, domestic contract) made before January 1, 2012, provided for the division of the pension assets or for a final settlement that included the value of the pension assets without requiring their division.
 
If you and your spouse are affected by the family law transition rules, you should consult with your lawyer and the pension plan administrator to determine how these changes affect you.  The pension plan administrator is responsible for determining whether the old or new pension valuation and division rules apply to your Settlement Instrument.  Since Settlement Instruments may not always be clear, the pension plan administrator may need to consult with its own lawyer before making this decision. -05/2012
 
 
Q1203. I have a pension benefit that is subject to the Ontario Pension Benefits Act. My spouse and I have a Settlement Instrument (court order, family arbitration award, or domestic contract) made in 2012. Can I get the Family Law Value from an independent actuary or do I have to get it from the plan administrator?
 
A1203. Under the new pension valuation and division rules, the Family Law Value must be calculated by the plan administrator. -03/2012
 

 

Q1204. I had my pension benefit valued by an independent actuary.  However, my spouse and I were not able to finalize our Settlement Instrument (court order, family arbitration award, or domestic contract) by December 31, 2011.  Do I need to have my pension benefit valued again by my plan administrator?
 
A1204. Yes. If your Settlement Instrument is made after December 31, 2011, the new pension valuation and division rules apply to you. Therefore, your pension benefit must be valued by the plan administrator using the formulas set out in Ontario Regulation 287/11 [New Window]. Note that the value calculated by the plan administrator may be different from the value that was calculated by the independent actuary. -03/2012
 
 
Q1205. If the old rules apply to the breakdown of a spousal relationship, can the former spouse request an immediate payment of his or her share of the pension assets when the new rules come into effect?
 
A1205. No, there will be no retroactive application of the new rules. This means that the former spouse will have to wait until the plan member terminates employment or plan membership, retires, dies or reaches the normal retirement date under the pension plan (whichever event occurs first) before the former spouse can receive his/her share of the pension assets. -06/2011
 
 
Q1206. Can a plan administrator choose not to provide the calculations related to family law matters?
 
A1206.  No, the plan administrator does not have a choice. Effective January 1, 2012, the plan administrator must provide the calculations on breakdown of a spousal relationship as required by the Pension Benefits Act and regulations. -06/2011
 
 
 
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