Questions and Answers About Pension Division on the Breakdown of a Relationship in British Columbia

Abstract

In March, 1996, the first edition of this book was published to provide materials about the operation of the British Columbia Family Relations Act, and the Pension Benefits Standards Act as these statutes apply when a marriage breaks down and the assets to be divided include benefits in a pension plan. The Q&A was viewed as a helpful resource for family lawyers, plan administrators and their advisors, and former spouses. A revised edition was prepared by the British Columbia Law Institute in 2001.This third edition is being prepared in anticipation of the Family Law Act, SBC 2011, c. 25 coming into force on March 18th, 2013. Although the Q&A was prepared before that date, for ease of reference the questions and answers assume the FLA is already in force.The Family Law Act is an important development. It is a major modern restatement of family law that will have far-reaching repercussions for decades to come. Although much about the new Family Law Act and its pension division rules will be familiar, it will also introduce some fundamental innovations. In contrast to the FRA, Part 6 of the FLA applies equally to married and unmarried spouses. And the pension rules have been modified to provide more nuanced provisions for the division of a wider range of pension benefits, such as benefits under supplementary plans, and benefits in individual pension plans, while at the same time providing more flexibility to former spouses for securing income in retirement. Table 6 in the appendices is a section by section comparison of the FLA and the FRA to highlight what has been changed, and what remains the same.While the Family Law Act is the product of exhaustive and expert work of the Ministry of the Attorney General, it is with great pleasure that the Institute notes that many of the pension division refinements are based on recommendations made by the British Columbia Law Institute in Report on Pension Division on Marriage Breakdown, A Ten Year Review of Part 6 of the Family Relations Act (Report No. 44, May, 2006).The materials are in the form of Questions and Answers. The Questions and Answers are intended to be a reference to help resolve questions that might arise. Some of the questions raise very obscure points that are relevant for only a few plans. For the most part, most people should find the introductory portions of the Chapters in this book, as well as the Checklists in the Appendices, sufficient guides for applying the B.C. legislation. But if more difficult issues arise, this Q&A attempts to provide guidance on how to deal with them.The materials address questions raised by members and their spouses, plan administrators, plan advisors, and lawyers. Not all of the information will be of interest to people in all of these groups. Plan administrators, for example, will see a great deal of information concerning how to determine reasonable shares between member and spouse on the breakdown of a relationship, but issues like these will be resolved long before the administrator is asked to assist in actually dividing the pension entitlement.The information has been sorted into Chapters based on whether the member's pension has commenced at the time of the breakdown of a relationship, the kind of plan, and other categories, but to divide the information so that it would be useful to specific groups, such as just plan administrators or just lawyers or just former spouses, would have led to a great deal of duplication.In most cases, there is no doubt about the position under the legislation, but some questions raise very complicated points. Basically, the legislation speaks for itself and the final position will be answered by the courts.