Dividing Pensions

A complex area of Family Law in Ontario is dividing pensions among separating parties; specifically, dividing the pension at source.

The new laws in the Ontario Family Law Act with respect to dividing the parties' pensions, outline that a pension should be divided at source.

Section 10.1 of the Ontario Family Law Act was intended to solve the problem of a court requiring the consent of both parties with respect to transferring the parties’ pensions from one to another.

Rule 10.1 of the Family Law Act states as follows:

(1) A person may apply to the court for the determination of a question between that person and his or her spouse or former spouse as to the ownership or right to possession of particular property, other than a question arising out of an equalization of net family properties under section 5, and the court may,

(a) Declare the ownership or right to possession;

(b) If the property has been disposed of, order payment in compensation for the interest of either party;

(c) Order that the property be partitioned or sold for the purpose of realizing the interests in it; and,

(d) Order that either or both spouses give security, including a charge on property, for the performance of an obligation imposed by the order, and may make ancillary orders or give ancillary directions. R.S.O. 1990, c. F.3, s. 10 (1).

The case of VanderWal v. VanderWal clarified the fact that the new legislation regarding the division of pensions is not a presumption or statutory onus. The Court cited Nadendla v. Nadendla, which held that:

". . .  If the pension is not divided at source, the Applicant will have to deplete virtually all his liquid assets. In the result, his assets will be tied up in the pension while all of the Respondent's assets will be liquid. In contrast if the pension is divided at source both the parties will have a reasonable balance between liquid assets and savings for retirement."

Ultimately, The Court in VanderWal conveyed that each case will be judged on its own facts and that s.10.1 of the Family Law Act “merely creates another way for an equalization payment to be made.”
To learn more about dividing pensions as well as the services provided by Krol & Krol, call 905.707.3370 today.