Law Commission of Ontario releases recommendations in division of pensions on marital breakdown study

    TORONTO, Oct. 6 /CNW/ - "We are advocating adoption of the Immediate
Settlement Method as the primary means of settling pension issues", Patricia
Hughes, Executive Director of the Law Commission of Ontario said today as the
LCO released its recommendations on the division of pensions on marriage
    Dr. Hughes noted that there has been much confusion in the law about how
to treat pensions on separation. Family lawyers, judges and pension plan
administrators have all wanted to see some clarity in this area. If adopted,
the LCO's recommendations will settle controversies over different methods of
valuing interests under defined benefit pension plans and answer the lack of
an efficient and effective settlement mechanism for parties who wished to
resort to a pension in order to deal with Family Law Act(1) (FLA) equalization
    The LCO's primary recommendation is that when a spouse who is a member of
a pension plan decides to use the pension to settle an equalization
obligation, the Immediate Settlement Method be used. This requires the
valuation of the pension at the date of separation and a transfer out of the
pension fund for the benefit of the spouse to whom the equalization amount is
owed. It has the advantage of being relatively easy and straightforward.
    However, the LCO is also recommending that under certain circumstances,
parties have the option of using the Deferred Settlement Method. Under the
DSM, the pension is divided between the spouses, generally when the spouse who
is the pension plan member begins collecting his or her pension. As Dr. Hughes
explained, the "spouses may feel that the DSM is more appropriate when the
spouse with the pension is within ten years of the normal retirement age", but
she added "it should also be available in other cases if the pension plan
administrator agrees".
    The LCO's recommendations were developed as a result of submissions from
family and pension lawyers, pension valuators, pension plan administrators and
others. Final recommendations are available at
    Launched last September, the Law Commission operates independently of
government to recommend law reforms to enhance access to justice.

    Aussi disponible en français

For further information:

For further information: John Hill, Ministry of the Attorney General LCO
Counsel in Residence, Law Commission of Ontario, (416) 650-8406,

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