Vancouver Family Property Pension Division Lawyers deal with cases involving- what can often be a separating couple’s most significant family property asset- their private and public service sector pensions. Vancouver Family Property Pension Division Lawyers know there are various types of pensions that are divisible as family property. MacLean Law’s BC family lawyers operate from 5 offices located in Vancouver, Surrey, Kelowna, Fort St John and Richmond.
Vancouver Family Property Pension Division Lawyers 1-877-602-9900
There are two main types of pensions that are divided as family property:
- Defined Benefit Plans; and
- Defined Contribution plans
One of these two plans is often far better than the other. Click here to find out what the differences are between these two types of pensions and why one is often worth more.
Complications for pension division can arise when both parties have pensions with dates for retirement that are different. Incomes often decline on retirement at which point the person who begins to receive their pension can end up with a far lower income than their younger working spouse who hasn’t started to recive their pension yet. Pension division can also be complicated when their are supplemental plans for high earning spouses, new spouses after separation, death benefits issues, joint or sole survivor calculations and the like. For a great article on high income earner pension issues click here.
Filing protective pension forms and getting restraining orders to ensure the beneficiary is not changed are important steps to take. The spector of “double dipping” where one spouse buys out the other form their pension and then has their pension income divided again in a sppousal support claim by their spouse.
Part 6 of the Family Law Act is very complex but you can click here for a government of BC summary
Vancouver Family Property Pension Division Lawyers know this area is extremely complex and full of traps for the unwary and wise counsel will often consult a family law pension division specialist to fully protect their family law clients.
Vancouver Family Property Pension Division Lawyers 1-877-602-9900
There have been very few reported family property pension division disputes decided by BC courts since the new Family Law Act came into effect in 2013. Our top rated Vancouver Family Property Pension Division Lawyers were interested to see a recent decision where unequal division of a separarted spouse’s pension was ordered. Kraft v Kraft 2018 BCSC 496 provided a review of a rarely used section to permit unequal division of a spouse’s pension plans after separation.
[161] Section 129 of the FLA gives the court authority to deviate from the general rule that pension division is determined as of the date of separation. It provides:
Reapportioning benefits
129 The Supreme Court may reapportion to a spouse entitlement to all or part of a member’s benefits under a plan for the purpose of providing the spouse with an independent source of income if
(a) it is necessary, appropriate or convenient in the circumstances, and
(b) the financial and property arrangements between the member and spouse to address the spouse’s need to become or remain economically independent and self-sufficient would otherwise require an order
(i) respecting spousal support, or
(ii) requiring the member, after pension commencement, to pay the spouse a share of the benefits under the plan, or under another plan, as they are received.
[162] Section 129 has only been judicially considered once, in Joffres v. Joffres, 2014 BCSC 1778. There, one spouse sought a division of the other spouse’s pension as of the date of trial. The court declined to reapportion the pension pursuant to s. 129. Nonetheless, Justice G.C. Weatherill analyzed the relevant provisions and law as follows:
[217] Under the FLA, pensions are family property subject to equal division: FLA, ss. 81 and 84(2)(e). The FLA’s Division of Pensions Regulation, B.C. Reg. 348/2012, s. 1 defines the “entitlement date” as the date in a Part 6 FLA order on which the spouse became entitled under s. 81(b) of the FLA to an interest in the member’s benefits under the plan. The entitlement of each spouse to an undivided half interest in the other’s pension arises on the date of separation: FLA, s. 81(b); Stonehouse [v. Stonehouse, 2014 BCSC 1057] at para. 27.
[218] [The claimant] argues that, notwithstanding ss. 81 and 84 of the FLA, [the respondent’s] pension benefits should be reapportioned. [The claimant] says that reapportionment is a fair result because she and [the respondent] did not separate their finances until August 2012, almost 5 years after separation. She submits that a reapportionment of 38% to her and 62% to [the respondent] would give practical effect to an equal division of the 7 years of accrued benefits prior to financial separation.
[219] Section 129 of the FLA allows the court to reapportion pension benefits for the purpose of providing a spouse with an independent source of income if it is necessary, appropriate or convenient in the circumstances and the financial and property arrangements between the spouses to address the need to become or remain economically independent and self-sufficient would otherwise require a court order.
[220] In my view, given my findings regarding [the claimant’s] entitlement to the proceeds of sale of the House and spousal support, it is not necessary or appropriate to reapportion [the respondent’s] pension benefits under s. 129 of the FLA.
[222] [The claimant] argues in the further alternative that the equal division of family property as at the date of separation is “subject to” an order that provides otherwise: FLA, s. 81. She submits that the legislature must have contemplated a date other than the date of separation in order to ensure fairness between the parties. While that may be so, it is my view that the orders I have made regarding the division of the proceeds of sale of the House and spousal support effect a fair result.
[Emphasis in original.]
Accordingly, G.C. Weatherill J. did not apply the section.
[163] I note that s. 1 of the Divisions of Pensions Regulation, B.C. Reg. 348/2012 contemplates the possibility of a court order that sets a pension entitlement date at a different date than the date of separation:
“entitlement date” means
(a) the date that, in a section 127 agreement or a Part 6 order, is specified as the date on which the spouse became entitled under section 81 (b) of the Act to an interest in the member’s benefits under the plan, or
(b) if another date is specified in a section 127 agreement or a Part 6 order as the end date of the period in relation to which the spouse’s proportionate share of the member’s benefits is to be calculated under the Act, that specified date;
[Emphasis added.]
[164] The test that must be met is that in s. 129 of the FLA, which allows the court to reapportion pension benefits for the purpose of providing a spouse with an independent source of income if:
(a) it is necessary, appropriate or convenient in the circumstances, and
(b) the financial and property arrangements between the member and spouse to address the spouse’s need to become or remain economically independent and self-sufficient would otherwise require an order [for spousal support] …
[165] I note that the FRA had a provision similar to s. 129 of the FLA. Section 65 of the FRA provided that if the provisions for the division of property, including pensions, would be “unfair” with regard to the parties’ circumstances, the court could order a reapportionment to remedy the unfairness. In Thornett v. Thornett, 1999 BCCA 437, the Court of Appeal upheld a decision to set one spouse’s pension entitlement as of the date of trial, rather than the date of separation, pursuant to s. 65 of the FRA.
[166] The facts in Thornett bear some similarity to the case at bar, although in that case the length of time between the date of separation and the date of trial was much shorter:
[2] The parties were married for over 28 years. The appellant husband, a ship’s pilot, is 55. The respondent wife is 54. She has a Grade 9 education and has had little occupational training or experience outside the home. For most of her married years she was the primary caregiver for the children of the marriage and, in addition, had the usual household duties and responsibilities. The two children of the marriage are now adults and self-sufficient. The husband worked on tugboats until 1992 when he became a ship’s pilot after an apprenticeship.
…
[7] The husband advanced to his present occupation as a ship’s pilot, with its attractive pension scheme, as a result of his years of experience in B.C. waters on tugboats. Those prior years were years of the marriage. In my view those years helped to lay the foundation for the pilot’s pension and it would be unfair to restrict the basis of the wife’s share only to the 2 to 3 years of actual pensionable service before the triggering event. The trial date division remedies that unfairness.
[167] The test under s. 65 of the FRA is different from s. 129, but Thornett stands for the principle that in the right factual circumstances, the court is justified in deviating from the general rule that pensions are divided at the date of separation, in order to remedy unfairness.
[168] In the unique circumstances of this case, I find that the test for reapportionment of the pension in s. 129 of the FLA is made out.
[169] It is necessary to divide the pension as of the date of trial in order to provide Ms. Kraft with an independent source of income. As noted, Ms. Kraft’s annual income in 2015, not including support payments, was $16,782. Receiving a 50% share in the pension will allow her to become economically self-sufficient moving forward.
[170] This reapportionment is necessary and appropriate in the circumstances to ensure that Mr. Kraft meets his spousal support obligations to Ms. Kraft. As noted, the spousal support arrears amount to $563, 376 due to Mr. Kraft underpaying spousal support to Ms. Kraft from 1997 until the Crawford Order.
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