Actuaries Oppose Bill 133

I'm late in posting this, but in view of recent legislative progress of Bill 133, I wanted to share the following letter to Ontario Attorney General, Chris Bentley, from James Jeffery and Kelly McKeating, two London, Ontario actuaries who regularly provide pension valuations in Family Law proceedings.

In their correspondence, they set out their concerns regarding changes in the way Ontario pensions are to be valued and divided pursuant to proposed amendments to Ontario's Family Law Act, as set out in Bill 133.

December 1, 2008

The Honourable Chris Bentley

Attorney General of Ontario

11th Floor, 720 Bay Street

TORONTO, Ontario, M5G 2K1 

Dear Sir:

      RE: ONTARIO BILL 133 - PENSION VALUATION AND DIVISION

                 FOR PURPOSES OF THE FAMILY LAW ACT       

 The pension aspects of Ontario Bill 133 provide for a lump-sum release of value from Ontario regulated defined benefit pension plans. This offers welcome relief from the problematic "if-and-when" divisions that are often the only at-source division solution permissible under current rules.

 On the other hand, the proposed new valuation rules will have very serious unintended consequences. Depending on the particulars of the regulations, the consequences will be either unacceptably unfair to the non-member spouse to the profit of the plan member and/or the plan, or they will impose unintended damage to the interests of the plan member and/or the plan itself.

 We are sure you will agree that the latter would be extremely unfortunate at a time when our pension system is in crisis. Moreover, the intended simplification and cost savings are unlikely to be realized. These points are explored more fully in the attached analysis, which we respectfully invite you to carefully consider.

 For very good reasons, the concept of fixed formula valuation rules administered by pension plans was rejected by both the Ontario Law Reform Commission report tabled in 1995, and the Law Commission of Ontario's report tabled in September, 2008.

 Accordingly, we strongly urge that the portions of Bill 133 which relate to permissible at-source division go forward after careful consideration of the details. The valuation aspects should be dropped or deferred pending a fully informed, balanced review.

Yours very truly,

Dilkes, Jeffery & Associates, Inc.

JAMES E. JEFFERY, FSA, FCIA        KELLEY McKEATING, FSA, FCIA

Actuary                                             Consulting Actuary

Bill 133 was ordered for Third Reading on April 7, 2009.

The current version of Bill 133, as amended by the Ontario Legislature's Standing Committee on Social Policy, is now online.

The new treatment of pensions pursuant to amended Bill 133 is summarized in the amendments as follows:

Under a new section 10.1 of the Act, the net family law value -the imputed value, for family law purposes of a spouse’s interest in a pension plan is to be determined in accordance with the Pension Benefits Act. The section also restricts the court’s power to make orders requiring the division of the interest in a pension plan in connection with the equalization of the spouses’ net family property. An order may provide for the immediate transfer of a lump sum out of the pension plan but, with one exception, cannot provide for any other division of the spouse’s interest in the plan. The exception applies if the spouse has begun to receive a pension under the plan on or before the valuation date. In that case, an order may only provide for the division of the pension payments. Additional restrictions that apply to the division of the interest in the pension plan are also described.

- Garry J. Wise, Toronto

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Ontario's New Family Law Pension Regulations Still MIA

While Bill 133, Ontario's Family Statute Amendment Act, became law in May, regulations to establish Ontario's new pension calculation rules are still in limbo - leaving a bit of a black hole for parties and professionals in the Province's family law system.

Under Bill 133,the valuation, or "net family law value," of a pension plan member's entitlements will be provided to spouses directly by pension plan administrators on the request of either spouse. Additionally, up to 50% of a spouse's pension entitlement attributable to the period of a marriage may be paid out to his or her spouse from the pension plan itself, if the transfer is provided for by a Court Order, a family arbitration award or Separation Agreement.

This brings significant modification to the calculation of equalization entitlements under the Family Law Act and in most cases, will streamline the determination of spouses' net family property in family law negotiations and proceedings.

The Bill was intended to significantly reduce the expense of divorce proceedings, by eliminating the current need for costly, actuarial valuations of each spouses' employment pension entitlements in most cases.

However, until the method of calculating "net family law value" of a pension is determined by anticipated Regulations, it is not possible to utilize the new law or to take advantage of the streamlined system that is contemplated by it.

Penny Hebert of Pension Appraisal Solutions provides the latest on the pension-regulation waiting game in a September newsletter:

We had a call from a lawyer recently asking for our advice on how to word their separation agreement according to Bill 133. Much to their dismay, we had to tell them that the pension portion of Bill 133 has not come into force yet!

Family law pension buzz that dominated the pension scene from the spring of 2008 to the spring of 2009 has been silenced, but only for the short term. The buzz will be back in 2010, probably later in the year than earlier.

Bill 133, the Family Law Statue Amendment Act, 2009, received royal assent May 2009 and we are all waiting for a look at the regulations. Many lawyers are asking us when the new pension rules will be finalized. As estimated in our April 2009 newsletter, John D. Gregory, General Counsel for the Ministry of the Attorney General, recently confirmed that it is unlikely that the new pension rules will be in force before the new year.

Pension plan administrators cannot finalize their systems for calculating the new family law, pension value and for initiating a division of the pension when the marriage breaks down until the regulations have been finalized. Some of the larger pension administrators are suggesting they will need six months or more to get their new systems developed and activated.

Some of you are carrying on as usual when presented with a case that involves a pension. Most of you are playing the waiting game, and understandably so. Although the new rules will simplify the pension issue for your clients who have pensions when they separate, it may not be better.

Family law practitioners wanted pensions simplified and plan administrators wanted a single pension value. The LCO responded by offering an ‘Immediate Settlement’ regime for dealing with the pension. The Ministry of the Attorney General responded by enacting an ‘Immediate Settlement’ regime with the plan administrator alone providing the value of the pension for NFP purposes and for pension division purposes. Both stakeholders received their wish with Bill 133. Only on review of the regulations to Bill 133, will the major stakeholders to an individual’s pension find out how the new pension rules will work.

- Garry J. Wise, Toronto

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Ontario Judges Balk at Bill 133 Investigation Duty

The Globe and Mail reports that Ontario's family court judges are not happy with the new, investigative duties assigned to them by Ontario's proposed Bill 133 in child custody applications by non-parents:

A confrontation is brewing between family court judges and the Ontario government over a scheme aimed at preventing a repeat of the shocking death of a Toronto child last year.

The plan would require judges to play the improper role of "investigators" in child-custody applications launched by non-parents, a group of 12 judges said in a submission to a committee of MPPs studying the proposed legislation, Bill 133.

...The judges condemned the new provisions as "an unwieldy and intrusive scheme" that will force judges to assemble a welter of evidence involving prior child protection proceedings, family law proceedings and criminal record checks.

"It is improper for judges to assume this role," they said. "A court is not equipped to administer a scheme of this nature, nor are judges equipped to conduct the kind of investigations contemplated. We are convinced Bill 133 does not provide a workable system."

"In a system that is critically under-populated by lawyers, the task of judges becomes more difficult," they said.

- Garry J. Wise, Toronto

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Bill 133: Ontario's Family Statute Law Amendment Act

Sweeping change will come to Ontario family law as a result of Attorney General Chris Bentley's introduction of Bill 133 yesterday in the provincial legislature.

The legislation includes major change to the calculation and distribution of employment pension plan entitlements between separating spouses. It also introduces new procedures for changing a child's surname, enhances availability and enforcement of restraining orders, and simplifies procedures for annual recalculation of child support obligations.

Under the Bill, the valuation, or "net family law value," of a pension plan member's entitlements will be provided to spouses directly by pension plan administrators on the request of either spouse. Additionally, up to 50% of a spouse's pension entitlement attributable to the period of a marriage may be paid out to his or her spouse from the pension plan itself, if the transfer is provided for by a Court Order, a family arbitration award or Separation Agreement.

This brings significant modification to the calculation of equalization entitlements under the Family Law Act and in most cases, will streamline the determination of spouses' net family property in family law negotiations and proceedings.

The Bill will also significantly reduce the expense of divorce proceedings, by apparently eliminating the current need for costly, actuarial valuations of each spouses' employment pension entitlements in most cases.

Other highlights of the Bill include:

• Provision for annual financial disclosure by child support payors and automatic recalculation by the Family Responsibility Office of the quantum of child support then payable for the subsequent year;


• Strengthened provision for restraining orders in short-term cohabitations;


• Amendments to provincial Change of Name legislation to permit a parent to apply to a Court to have his or her surname added to a child's name, if consent is refused by the other parent;


• Police checks, criminal record searches, current prosecution searches, and Children's Aid Society record searches will be mandatory for any non-parent who makes an Application for the custody of a child. These records will be admissible in evidence in custody Applications.


• The Bill enhances confidentiality of court records in custody and access applications under the Children's Law Reform Act by requiring courts to consider whether to make an order limiting access to the court file, or to prohibit the publication or the making public of information that identifies anyone referenced in the court file.


• The Bill excludes from the calculation of the value of property owned by a spouse on the date of marriage any debts directly related to the acquisition or significant improvement of a matrimonial home.

The full text of Bill 133 is online. See: Ontario's Family Statute Law Amendment Act, 2008

- Garry J. Wise, Toronto

Visit our Toronto Law Firm website: www.wiselaw.net

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Update: Bill 133 Passes - Family Statute Law Amendment Act, 2009

Bill 133, Ontario's Family Statute Law Amendment Act, 2009, was carried in its Third Reading on May 7, 2009, and will become law upon receiving Royal Assent.

The Bill enacts significant amendments to Ontario's family law regime.  Highlights include changes to:

• the manner in which spousal pension entitlements will be calculated and divided; specifically, the Bill requires pension plan administrators to provide calculations of the "imputed value of a pension entitlement for family law purposes", and allows for immediate payment of lump sums to non-member spouses from pension plans in satisfaction of their pension division claims;
• the calculation of pre-marital assets and liabilities under the Family Law Act;
  
• procedures for applying for domestic restraining orders;
• procedures for change of name applications for children
• custody applications by non-parents, who will now be required to file with the courts police record checks and reports by children's aid societies as to any involvement they have had with such custody applicants.

The final version of the Bill 133 is online here.

- Garry J. Wise, Toronto

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Ontario A.G. Chris Bentley at Toronto Family Law Summit

I'm spending today and tomorrow attending (via live videostream) the Law Society of Upper Canada's 5th Annual Family Law Summit at Toronto.

Ontario Attorney General Chris Bentley has just concluded a short speech, recapping the Province's family law initiatives launched during his four-year tenure in the role.

In opening, Mr. Bentley candidly remarked that he likely knows less about family law than any other person attending the Summit. He did little to dispel that impression in the remainder of a twenty-minute, rather self-congratulatory presentation that was surprisingly short on substance.

Here are a few highlights from the speech, which I've also been live-tweeting:

• The A.G. favours a Unified Family Court throughout the Province, but noted that the constitutional issues presented by overlapping federal and provincial jurisdictions in family law present an obstacle, as the Province can't create these courts on its own. While his enthusiasm for streamlining family law with one, unified system was clear, he made no mention of any consultations with the federal government aimed at actually getting there.

• On simplifying the court system by "getting rid of the paper and streamlining steps in the Family Courts," the A.G. was clear that he "won't do it." Curiously, he indicated he simply leaves it to the legal profession to address these concerns. I am not sure how the profession can directly facilitate any of the real solutions here, such as a court system that allows e-filing of documents or the elimination of duplicative court forms, at least some of which result from the Attorney General's own initiatives.

• Finally, with respect to the long-awaited implementation of the pension-equalization reforms provided for in Bill 133, Mr. Bentley stated "the period of consultations is over... An announcement on implementation will be made very, very soon." There were audible groans from the audience in response to this remark. Bill 133 received Royal Assent in May, 2009. The legislation's pension reform has been in limbo ever since, awaiting necessary, enabling regulations.

- Garry J. Wise, Toronto

Visit our Toronto Law Firm website: www.wiselaw.net

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140 Law - Legal Headlines for June 17, 2011

Today's leading legal headlines from Wise Law on Twitter:

• Chief Justice Winkler at Family Law Summit - System needs reform. Intended Sept comments as a lightning rod for change to the whole system
• Delivering a Lawyer Within 15 Minutes (Soda Extra) -http://goo.gl/ZQGxt
• Judge rules Righthaven lacks standing to sue, threatens sanctions over misrepresentations - http://goo.gl/bw48z
• CIA tried to discredit liberal blogger, at request of Bush White House - http://goo.gl/d7Mrp
• Supreme Court Expands Juveniles’ Miranda Rights -http://goo.gl/3FNHJ
• Alabama governor signs bill banning abortions after 20 weeks -http://goo.gl/ZCoAZ
• Righthaven Goes Down Hard: A Look at the Democratic Underground Decision - http://goo.gl/BwiWi
• Assange 'being treated like a caged animal' - http://goo.gl/nyzPF
• Therapist blamed for 'botched' custody decision - Toronto Star -http://goo.gl/poAxm
• Peel police officers fabricated evidence: judge - CTV.ca -http://goo.gl/0HvkM
• Former senator Lavigne gets jail time for fraud - Vancouver Sun -http://goo.gl/2Vvy2
• Juror who used Facebook to contact defendant sentanced to eight months jail - Sydney Morning Herald - http://goo.gl/WpYAT
• Removing prostitution laws would increase harm, court told - Vancouver Sun - http://goo.gl/G38mR
• Taser cop shouldn't go to jail, lawyer says - Toronto Sun -http://goo.gl/xpjdN
• Tips for Lawyers from the Jury - http://goo.gl/w9cxT
• Judges Come Down Hard on Wired Jurors - http://goo.gl/zaEz6
• Judge hints jurors may see raw video of Michael Jackson's last days - http://goo.gl/qj1lT
• Saggy pants lead to passenger's arrest - http://goo.gl/HbUzu
• Man files suit after ‘terrifying’ FBI raid on wrong house -http://goo.gl/JHm5O
• Top court won't review Hells Angels bail case - Montreal Gazette -http://goo.gl/1MyhL
• Teen's anti-Semitic views not changed: court report -http://goo.gl/QhWqm
• AG Bentley at Fam. Law Summit: Favours Unified Fam Cts. Notes constitutional issues, but no mention of consultation with feds to get there.
• AG Bentley at Family Law Summit: Getting rid of paper, streamlining steps in Fam. Cts: He won't do it, will leave it up to the profession.
• AG Chris Bentley at Family Law Summit - Consultations over, date of Bill 133 pension implementation announcement "very, very soon."

Thank you to all of our readers! Have a fantastic weekend.

- Rachel Spence, Toronto

Visit our Toronto Law Firm website: www.wiselaw.net

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140 Law - Legal Headlines for April 18, 2011

We hope that all of our readers had a wonderful weekend! Here are today's leading legal headlines from Wise Law on Twitter:

• EDITORIAL; Wal-Mart v. Women: No company is too big to be held accountable http://is.gd/KxUcPw
• Why alimony cheats shouldn’t blog http://is.gd/Y6Z53A
• Safe-injection site slashes fatal overdoses in Vancouver: report - Montreal Gazette http://is.gd/MJFBa0
• USA Justice | You Get the Judges You Pay For - NYTimes.com:http://nyti.ms/hu5mI7
• Bill 133 Update: Division of pensions on marriage breakdown: Ontario government releases draft regulations - http://goo.gl/AO5jf
• Match.com to check users in sex offender registry - http://is.gd/JbeyKq
• Ontario judge rules mentally ill can be held in jails - Globe and Mail - http://is.gd/agKk93
• Bolivia set to pass law giving Nature equal right to Humans
• U.A.E. to limit all smartphones: BlackBerry maker http://is.gd/zY1I3m
• Civility is the Last Refuge of Scoundrels (Paul Krugman) - http://is.gd/0TRUTu
• Obama Asks Supreme Court to Validate Warrantless GPS Tracking - http://is.gd/rK4fWz
• Anti-abortion Tory candidate says Obama worst president - http://is.gd/WEWXIO
• Ikea: Swedish for Union-Busting? http://goo.gl/iNCRx
• Dead air for Ryerson community station http://is.gd/kEs6cQ
• Righthaven operating agreement revealed by Nevada District Court - given absolutely no rights to the works in question - http://t.co/n3AJyrO
• The taser wars continue http://is.gd/Rz1U4e
• Current employees are suing employers - Montreal Gazette - http://is.gd/UBEJaR
• You're a Lawyer — Now What? http://is.gd/N6IuSH
• Lawyer involved in gold scam, cops allege - Toronto Sun - http://is.gd/roXUOV
• Four Phone-Hacking Cases to Be Tests for Further Claims, Judge Says http://is.gd/m3neXE
• Future of Canada's polygamy law rests in hands of chief justice - Vancouver Sun http://is.gd/KB2dpv
• Friends with Occasional Benefits, and What Happens If You Beat Them Up http://is.gd/9VYf3d
• Damphousse fires back against wife - Toronto Sun http://is.gd/NkZ7ds
• Prison chief fights release of Ashley Smith video - Toronto Star - http://is.gd/Cw6JUr
• 'Discriminatory' royal law may change http://is.gd/SJjrUX
• Yale announces new steps amid sexual harassment probe http://is.gd/hWGtCI
• Update: YouTube Musician Evan Emory Sentenced to 60 Days in Jail - http://goo.gl/BY0jd

Rachel Spence, Toronto

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