Pension Plan Design and the Modern Family:
The Equities and Inequities of Pensions as
Family Property and Spousal Benefits
Anne Slivinskas
Associate General Counsel and
Director, Pension Law and Policy Group
May 23, 2014
2 Overview
1. What are the rules?
2. Do they meet the needs of members and their spouses
Upon separation? Upon death?
3 Pensions as Property
Ontario’s new rules for pension valuation and division
1. A single prescribed method for pension valuation;
2. Settlement options determined by pension status;
3. Extension of valuation and settlement options to common law spouses.
4 Pensions as Property:Single Prescribed Valuation
FLA value = PBA value
Calculated by plan administrator, not member’s actuary
Prescribed formula & forms
5Pensions as Property: Pension Status on FLV Date Drives Form of Settlement
Immediate lump sum transfer for pre-retirement
separations
No need to wait for member's termination, death or
retirement
Division of pension payments for post-retirement
separations
6 Pensions as Property: Extension of Valuation and Division Options to Common Law
Married spouses• date of marriage
Married spouses who cohabitated before marriage• date jointly chosen, no earlier than date they
moved in and no later than date of marriage
Common law spouses• date jointly chosen, no earlier than date moved in
7 Death Benefits – What needs are they designed to meet?
Family property? Spousal support? Both?
8 Who is entitled to survivor pension?
9 When is eligibility tested?
Pre-retirement - Member’s death Post-retirement –Member’s retirement
10 Policy Concerns
Date of entitlement determination is arbitrary
11 Determination of competing claims depends on factual finding of spousal status
12 Member does not have unilateral control over the death benefit
13 Proposed Solution: Priority to Designated Beneficiaries and Estates
Remove the spousal priority and allow members to choose a beneficiary for their death benefits with estate as default
Remove joint and survivor pensions as the minimum standard, but allow pensions to be joint and survivor pensions at the election of the member and her or his spouse;
Allow surviving spouses to make a dependent’s claim against the designated beneficiary or the estate, as the case may be.
• 5650 Yonge Street Toronto, OntarioM2M 4H5
Anne Slivinskas
Associate General Counsel and
Director, Pension Law & Policy Group
416.730.6339
