Pension Division Review Project Committee wraps up review of double-dipping, private annuities at October 2019 committee meeting

31 October 2019

By Kevin Zakreski

At its monthly committee meeting, BCLI’s Pension Division Review Project Committee completed its review of two topics that had figured in earlier committee meetings.

The first topic involves something that has been informally called double-dipping. This may occur when a spouse receives a share of the other spouse’s pension benefits under family-law legislation and still may be entitled to other benefits or a share of benefits under other legislation. In British Columbia, section 145 of the Family Law Act and provisions that were brought in when the new Pension Benefits Standards Act was enacted have addressed this problem.

These useful rules only extend as far as British Columbia legislation. A British Columbia member of a pension plan regulated, say, under the federal Pension Benefits Standards Act, 1985, wouldn’t have the benefit of section 145. While a case could be made that this state of affairs produces some unsuitable results, the committee concluded that constitutional law would, in all likelihood, render any solution that relied on amendments to part 6 of the Family Law Act invalid. In view of this conclusion, addressing the problem doesn’t fall within this committee’s mandate, but it may be in the purview of other organizations.

Private annuities, the second topic taken up in the meeting, are currently addressed by section 118 of the Family Law Act. This section provides that “the provisions under this Part [i.e., part 6] that apply to the division of benefits after pension commencement apply to the division of the annuity.” This declaration has the effect of making section 117—a general provision that deals with pension division of local plans after the pension commences—applicable to private annuities.

In the committee’s view, more can be done with the legislation to address some of the features of private annuities that have no equivalents in pension plans. The committee is developing proposals to address these special features of private annuities.

The Pension Division Review Project benefits from having an expert project committee. The committee is working toward publishing a consultation paper, in which it will set out proposals on these and other issues. The consultation paper will allow the public to comment on the committee’s proposals to reform pension division under the Family Law Act.

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