[2] Ministry of the Attorney General, Toronto, 1995.
[3] References are to the law as of October 31, 2008.
[4] R.S.C. 1985, c.C.8. The CPP is, of course, federal legislation, but section 55.2 of the CPP effectively authorizes provinces to enact legislation permitting parties to contract out of the CPP credit-splitting provisions that otherwise apply upon breakdown of the spousal relationship. Ontario, however, has not enacted such legislation. This is discussed in more detail, below, in section V (“Other Issues”).
[5] See Ari N. Kaplan, Pension Law, Irwin Law, Toronto, 2006, pp. 96-97.
[6] Examples of such legislation include the Teachers’ Pension Act, R.S.O. 1990, c. T.1 and the Ontario Municipal Employees Retirement System Act, 2006, S.O. 2006, c. 2. Strictly speaking, the plans in question were “continued” by these Acts, as the plans were established under predecessor legislation.
[7] Submission by the Canadian Institute of Actuaries to the Ontario Expert Commision on Pensions (2007), pp. 6-7.
[8] For example, the employer could become insolvent, as pointed out by Keith Ambachtsheer, “Cleaning Up The Pension Mess: Why it will take more than money” in Backgrounder No. 78 (C.D.Howe Institute, Toronto, 2004), pp. 2-3. If insolvency occurs at a point when plan assets are insufficient to fund pension liabilities, employees may find their benefits reduced, perhaps quite substantially. (See discussion in Section II, below, under heading Wind-Up of Pension Plans.)
[9] Usually, of course, the years of highest earnings will be the employee’s final years with the employer, but that is not always the case.
[10] Jack Patterson, Pension Division and Valuation: Family Lawyers Guide (2nd ed.), Canada Law Book Inc., Aurora, 1995, p. 65.
[11] Kaplan, note 5, p. 100.
[12] The latter type of hybrid plan is sometimes referred to as a combination plan (OLRC, note 2, p. 13) or composite plan (Richard Shillington, Occupational Pension Plan Coverage in Ontario, statistical report prepared for the Ontario Expert Commission on Pensions, Infometrica Limited, 2007, p. 8).
[13] Kaplan, note 5, p. 102.
[14] Shillington, note 12, p. 14. It is not clear whether these figures exclude only Ontario employees in federal jurisdiction or whether they also exclude Ontario employees who are members of pension plans registered under the legislation of other provinces.
[15] Shillington, note 12, pp. 14-15.
[16] According to 2004 figures, over 80% of individuals who are members of a pension plan are in a defined benefit plan; see Kaplan, note 5, p. 3.
[17] Shillington, note 12, p. 31, cites figures showing that in 1997 there were 1,112,000 members in defined benefit plans, 147,000 in defined contribution plans and 77,000 in combination plans, while the corresponding numbers in 2006 were 1,352,000, 268,000 and 102,000.
[18] Shillington, note 12, p. 3. The numbers provided are for 2006.
[19] According to Shillington (note 12, p. 3), there 955,000 men and 469,000 women enrolled in Ontario jurisdiction pension plans in 1985.
[20] Shillington, note 12, pp. 10-12.
[21] See Lynn MacDonald, “Gendered retirement: The welfare of women and the ‘new’ retirement” in New Frontiers of Research on Retirement, Leroy O. Stone (ed.), Statistics Canada, Ottawa, 2006, p. 157.
[22] See Monica Townson, “The impact of precarious employment on financial security in retirement” in Stone (ed.), note 21, p. 364.
[23] Part-time employees may be in a better position than other non-standard workers because of legislative protections that apply where the employer offers a pension plan that covers full-time employees; however, as Townson notes, such protections are of no avail where the employer does not offer any pension plan: Townson, note 22, p. 373.
[24] Shillington (note 12, p. 45) cites Canada Revenue Agency figures showing that average reported pension income in 2004 for those aged 65 and over was $18,531 for males and $11,237 for females.
[25] 30 & 31 Vict., c. 3 (U.K.).
[26] Kaplan, note 5, p. 20.
[27] Some Ontario jurisdiction pension plans are exempted from the PBA.
[28] R.S.O. 1990, c. P.8.
[29] R.S.C. 1985, c. 32 (2nd Supp). Interestingly, section 31 of the PBSA provides that provincial pension benefits legislation is deemed to apply to PBSA plans in relation to the payment of benefits and the designation of beneficiaries where the provincial legislation is not inconsistent with the PBSA. This provision has been held to make provincial legislation allowing the attachment of pension benefits to enforce arrears in support apply to benefits from a federally-regulated pension plan notwithstanding the absence of attachment provisions in the PBSA itself: Vellow v. Vellow, [1996] B.C.J. No. 904; 134 D.L.R. (4th) 657; [1996] 7 W.W.R. 96; 74 B.C.A.C. 284; 19 B.C.L.R. (3d) 322; 12 C.C.P.B. 1; 62 A.C.W.S. (3d) 750 (B.C.C.A.). Further, section 25 of the PBSA generally makes federally-regulated pensions subject to provincial matrimonial property laws. Despite this, it appears that some administrators of federally-regulated plans refuse to follow provincial law; see Thomas G. Anderson, “Pensions” in Federation of Law Societies of Canada 2006 National Family Law Program, p. 5.
[30] See subsections 4(4) to (6) of the PBSA and section 4 of the Pension Benefits Standards Regulations, 1985 (SOR/87-19) and Schedule I to the regulations. Pensions for federal public servants are provided under the Public Service Superannuation Act (R.S.C. 1985, c. P-36). There are several other statutes providing pension plans for persons who might broadly be described as employees of the federal government, such as, for example, the Royal Canadian Mounted Police Superannuation Act ( R.S.C. 1985, c. R-11 ).
[31] R.R.O. 1990, Regulation 909.
[32] Prince Edward Island has enacted pension benefits legislation (the Pension Benefits Act, S.P.E.I. 1990, c. 41) but the legislation has not been proclaimed in force.
[33] Curiously, despite the 1970 agreement, there appears to be no corresponding exempting provision for plans in which a plurality of members falls under federal jurisdiction.
[34] See Kaplan, note 5, p. 116. In July of 1993, the Canadian Association of Pension Supervisory Authorities (CAPSA) released a Proposed Multilateral Agreement (later revised) under which the pension legislation of the jurisdiction of registration would govern all matters related to pensions both for employees within the jurisdiction and those without; see Ian J. McSweeney, “Pension and Plan Member Relations” in Pension and Plan Member Relations (Tab 1), Emond Montgomery, 1997, p. 9. However, concerns were raised about that proposal, and more than fifteen years later efforts to replace the reciprocal agreements are still continuing. On October 21, 2008, CAPSA released a Consultation Document entitled Proposed Agreement Respecting Multi-Jurisdictional Pension Plans; the proposed agreement would see “plan matters” (matters affecting the plan as a whole, such as funding and registration) regulated by the jurisdiction having a plurality of plan members while the rules of the jurisdiction of the individual member would govern “entitlement matters” (matters dealing with individual rights, such as vesting and surplus distribution). If adopted, it would thus reflect what in any case seems to be the likely legal position. A multilateral agreement would presumably be implemented under section 93 of the PBA, which provides that the Minister of Finance may enter into agreements with authorities in such other jurisdictions as are “prescribed” that address the application of the PBA and the legislation of the other jurisdiction to “multi-jurisdiction pension plans” and the supervision and regulation of such plans. Where an agreement of this nature so specifies, subsection 95(5) goes on to provide that the legislation of one jurisdiction applies to the exclusion of the other to the extent specified in the agreement.
[35] R.S.C. 1985, c. 1 (5th Supp.).
[36] See paragraphs 6 and 7 of subsection 47(3) of the General regulation under the PBA.
[37] Kaplan, note 5, p. 127.
[38] Kaplan, note 5, p. 30.
[39] Section 35.
[40] In fact, the Human Rights Code (R.S.O. 1990, c. H.19) prohibits mandatory retirement, subject to certain exceptions.
[41] Kaplan, note 5, p. 281.
[42] PBA, s. 41.
[43] Section 41 provides that the commuted value of the early retirement pension must not be less than the commuted value of the pension that would have been payable at the normal retirement date; in other words, the early retirement pension must be at least actuarially equivalent to the normal retirement date pension.
[44] For example, where a full actuarial reduction is imposed, someone who retires at age 60 instead of age 65 would see a decrease of about 35 per cent (and this does not even reflect the impact of the forgone service credits and possible salary increases that would have been or may have been earned in the five extra years). See Jennifer Greenan, Morneau Sobeco Handbook of Canadian Pension and Benefit Plans, 12th ed., CCH Canadian Limited, 2002, pp. 38-39.
[45] Kaplan, note 5, p. 283.
[46] PBA, ss. 36-37. It should be noted that, although not stated explicitly in the PBA, the vesting rules in sections 36 and 37 apply only in respect of the basic pension benefit and not to “ancillary benefits” that can be offered under a pension plan in addition to the minimum benefits required under the PBA, such as disability pensions, unreduced early retirement pensions and other benefits enumerated in section 40. In the case of ancillary benefits, the benefit does not become vested until the employee meets the conditions for eligibility set out in the plan. See Kaplan, note 5, p. 269.
[47] PBA. subsection 63(1).
[48] PBA, subsections 67(1) and (2).
[49] Subse