“The purpose of the PBA was commented upon in Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services), 2004 SCC 54, [2004] 3 S.C.R. 152, at para. 38, as being of vital importance to long-term income security:
The Act is public policy legislation that recognizes the vital importance of long-term income security. As a legislative intervention in the administration of voluntary pension plans, its purpose is to establish minimum standards and regulatory supervision in order to protect and safeguard the pension benefits and rights of members, former members and others entitled to receive benefits under private pension plans[.]
Adrianna points to this “long-term income security” purpose of the PBA as antithetical to the appellant’s position. After all, once someone has died, there is no longer a need for income security. The difficulty with this approach – with this singular emphasis on the purpose of the PBA – is that it ignores the equally important legislative context of the FLA. The answer to this appeal lies at the intersection of these two pieces of legislation.
The equalization provisions within the FLA serve a very different purpose from the PBA, as reflected in the preamble to the FLA:
Whereas it is desirable to encourage and strengthen the role of the family; and whereas for that purpose it is necessary to recognize the equal position of spouses as individuals within marriage and to recognize marriage as a form of partnership; and whereas in support of such recognition it is necessary to provide in law for the orderly and equitable settlement of the affairs of the spouses upon the breakdown of the partnership, and to provide for other mutual obligations in family relationships, including the equitable sharing by parents of responsibility for their children[.] [Emphasis added.]
If the sharing of in-pay pension payments cannot continue to an estate, in many cases, dividing pension payments at source would lose force as a proxy for what would otherwise be entitlement to equalization of net family property under ss. 5(1), 7(1), and 9(1) of the FLA. This would be particularly true in situations like this one where, from an actuarial perspective, the retired member spouse’s life is likely to be long, but the non-member former spouse’s life is predicted to be short.
As before, s. 5(1) of the FLA provides that, when spouses separate and there is no reasonable prospect of resuming cohabitation, “the spouse whose net family property is the lesser of the two net family properties is entitled to one-half the difference between them.” Section 9(1)(a) of the FLA allows the court to order one spouse to pay the other the amount to which that spouse is entitled under the equalization regime. The idea here is that the value of property accumulated during the marriage partnership, in which spouses are assumed to have been equal partners, should be shared equally when that marriage ends. This includes the accumulation of a pension over the course of a marriage.
It is true that pensions have been referred to as “sometimes elusive assets for equalization purposes, being in reality a right to a future stream of income, rather than a current and exigible fund”: Kendra D.M.G. Coats et al., Ontario Family Law Practice 2020, Volume 2 (Toronto: LexisNexis Canada, 2019), at p. 537. It is because of the elusive nature of the pension that a new regime was introduced in 2009 to address these difficult issues. At the same time, the FLA was amended so that the family law value of an Ontario-regulated pension would be determined by the pension administrator pursuant to a formula set out in the regulations to the PBA: see FLA, ss. 4(1)(c), 10.1; PBA, s. 67.2. Section 67.2(1) reads:
The preliminary value of a member’s pension benefits, a former member’s deferred pension or a retired member’s pension under a pension plan, before apportionment for family law purposes, is determined by the administrator in accordance with the regulations and as of the family law valuation date of the member, former member or retired member and his or her spouse.”
Meloche v. Meloche, 2021 ONCA 460 (CanLII) at 100-105