Transcript Powerpoint

Pension Plan Design and the Modern Family:
The Equities and Inequities of Pensions as
Family Property and Spousal Benefits
Anne Slivinskas
Associate General Counsel and
Director, Pension Law and Policy Group
May 23, 2014
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Overview
1. What are the rules?
2. Do they meet the needs of members and
their spouses
 Upon separation?
 Upon death?
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Pensions as Property
Ontario’s new rules for pension valuation and
division
1. A single prescribed method for pension
valuation;
2. Settlement options determined by pension
status;
3. Extension of valuation and settlement options
to common law spouses.
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Pensions as Property:
Single Prescribed Valuation
 FLA value = PBA value
 Calculated by plan
administrator, not member’s
actuary
 Prescribed formula & forms
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Pensions as Property: Pension Status on
FLV Date Drives Form of Settlement
lump sum transfer for pre-retirement
 Immediate
separations
need to wait for member's termination, death
 No
or retirement
 Division of pension payments for post-retirement
separations
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Pensions as Property: Extension of Valuation
and Division Options to Common Law
Married spouses
• date of marriage
Married spouses who cohabitated before marriage
• date jointly chosen, no earlier than date they
moved in and no later than date of marriage
Common law spouses
• date jointly chosen, no earlier than date moved in
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Death Benefits –
What needs are they designed to meet?
 Family property?
 Spousal support?
 Both?
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Who is entitled to survivor pension?
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When is eligibility tested?
 Pre-retirement - Member’s death
 Post-retirement –Member’s retirement
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Policy Concerns
 Date of entitlement determination is arbitrary
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Determination of competing claims depends
on factual finding of spousal status
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Member does not have unilateral control
over the death benefit
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Proposed Solution: Priority to Designated
Beneficiaries and Estates
 Remove the spousal priority and allow members to
choose a beneficiary for their death benefits with
estate as default
 Remove joint and survivor pensions as the minimum
standard, but allow pensions to be joint and survivor
pensions at the election of the member and her or his
spouse;
 Allow surviving spouses to make a dependent’s claim
against the designated beneficiary or the estate, as the
case may be.
Anne Slivinskas
Associate General Counsel and
Director, Pension Law & Policy Group
416.730.6339
[email protected]
5650 Yonge Street
Toronto, Ontario
M2M 4H5