“To conclude, federal legislation does not clothe the (Pension Benefits Division Act) administrator with the power to split pension payments as a method of dividing family property. Consequently, the administrator cannot be ordered to do so. Parliament could create such a power. It has chosen not to. Indeed, in the recent case of Francis, the federal Crown successfully argued that there is no jurisdiction to order the administrator to divide pension payments as family property under the PBDA. I agree with the analysis in that decision.
Part I of the (Family Law Act) addresses issues of family property. Section 5 creates a prima facie entitlement to an equal division of net family property. Section 9 empowers a court to order equalization payments, and to make collateral orders to secure their performance.
The interest of one spouse in another’s pension benefits has long been recognized as a matter of matrimonial or family property: see Clarke, at p. 824. In 2009, the FLA was amended (s. 2009, c. 11) to create specific rules, contained in s. 10.1, about the division of pension entitlements. Subsections 10.1(3), (4), and (5) provide:
(3) An order made under section 9 or 10 may provide for the immediate transfer of a lump sum out of a pension plan but, except as permitted under subsection (5), not for any other division of a spouse’s interest in the plan.
(4) In determining whether to order the immediate transfer of a lump sum out of a pension plan and in determining the amount to be transferred, the court may consider the following matters and such other matters as the court considers appropriate:
-
-
-
-
-
-
- The nature of the assets available to each spouse at the time of the hearing.
- The proportion of a spouse’s net family property that consists of the imputed value, for family law purposes, of his or her interest in the pension plan.
- The liquidity of the lump sum in the hands of the spouse to whom it would be transferred.
- Any contingent tax liabilities in respect of the lump sum that would be transferred.
- The resources available to each spouse to meet his or her needs in retirement and the desirability of maintaining those resources.
-
-
-
-
-
(5) If payment of the first instalment of a spouse’s pension under a pension plan is due on or before the valuation date, an order made under section 9 or 10 may provide for the division of pension payments but not for any other division of the spouse’s interest in the plan. [Emphasis added.]
…
A broader interpretation s. 10.1(5) of the FLA is more compatible with the PBDA. Returning to the paramountcy jurisprudence, Gascon J. said in Moloney, at para. 27: “It is presumed that Parliament intends its laws to co-exist with provincial laws.” This presumption must also apply in reverse, and with at least equal force – it is presumed that the province intends its laws to co-exist with federal laws. I am unable to find that the Legislature intended to undermine or limit the operation of the PBDA.
When Ontario amended the FLA in 2009 to create s. 10.1, it would surely have known that the PBDA only provides for a lump-sum division: see Ontario Law Reform Commission, Report on Pensions as Family Property, at pp. 62, 171-172. See also, Law Commission of Ontario, Division of Pensions Upon Marriage Breakdown – Final Report (Toronto: Law Commission of Ontario, 2008). As noted in para. 18 above, the PBDA applies to pensions created by many federal statutes, no doubt affecting the pensions of countless Ontarians. I would avoid an interpretation of the FLA that frustrates the PBDA. A broader interpretation of s. 10.1(5) advances the goals of the FLA, while achieving harmony with federal pension legislation.
This is not say that it will always be appropriate to order a lump-sum division of a pension in pay. It will depend on the nature of the underlying pension legislation, the application of the criteria listed in s. 10.1(4) of the FLA, and “such other matters as the court considers appropriate” to achieve a just result in the case: see VanderWal v. VanderWal, 2015 ONSC 384, 54 R.F.L. (7th) 410, at para. 9.”