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Saturday, July 10, 1999Ruling on division of pension assets favours husband
Best v. Best: Actuary describes ruling as 'another nail in the coffin for the women'
OTTAWA - In a victory for most pension holders and a defeat for their spouses, the Supreme Court of Canada has set guidelines on how to divide pensions when a marriage falls apart.
Wayne Hiebert, Ottawa Citizen
Ted Best, who retired from the Ottawa Board of Education three years ago, said he's "very pleased" with the Supreme Court's ruling, which means he will be paying his former wife, Marlene Best, about $75,000. In an earlier ruling, the Ontario Court had ordered him to pay $148,000 on top of $2,500 a month in support.
The court decision yesterday ends a 10-year legal battle between Ted Best, a retired Ottawa Board of Education chairman, and his former wife, Marlene Best, on how to split his pension, which was worth almost $425,000 when they parted in 1988 after 12 years of marriage.
"This appeal raised some of the contentious and confusing issues surrounding the treatment of pensions in the division of property when a marriage ends," said Justice John Major, writing for the 8-1 majority, which overturned a ruling of the Ontario Court of Appeal.
The court, at a time when pensions are gaining increasing attention among ageing baby boomers, urged provinces to pass legislation governing pension division so other divorced couples won't have to go through expensive and lengthy litigation.
The nine judges faced the tough job of sifting through complicated calculations that have been widely debated by actuaries and lawyers and tested in lower courts across the country.
The court chose a method that ties a spouse's pension entitlement to the duration of the marriage, rather than the actual value of the pension plan.
"The premise that all years which contribute to the pension must be of equal value is not only extraordinary but also totally unrealistic," wrote Judge Major.
The ruling is expected to have immediate ramifications in Ontario and a potential future impact for other provinces.
Wayne Woods, an Ottawa actuary, said it will be a relief that the industry finally has guidelines to follow after years of internal bickering. But he said the ruling means the lucrative asset, which is second to none in many cases, will not be divided fairly.
"There's a significant advantage for the member spouse because it will relate to lower values that have to be divided on marriage breakdown," said Mr. Woods, of the Canadian Institute of Actuaries.
"I just think it's another nail in the coffin for the women. The fact of the matter is, the wife gives up her career . . . she loses, loses, loses, and she doesn't even get the full increment of the increase in value of her husband's pension plan to boot. Now, what's fair about that?"
The court accepted a formula favoured by Ted Best's lawyers, which would divide the value of the pension between the number of years he paid into it. Marlene Best would get half of 12 of those years -- the length of the marriage -- or about $75,000.
The Court of Appeal thought she was entitled to much more. In 1997, it upheld an earlier court ruling that awarded Marlene Best half of the value added to the pension during the specific years of the marriage when the pension was growing much faster than it had in the earlier years.
The Ontario Court had ordered Ted Best to pay his former wife almost $148,000 in equalization payments, on top of $2,500 a month in support.
Justice Claire L'Heureux-Dube was the one dissenter in the case, siding with Marlene Best.
Ted Best, 64, who retired three years ago, said he's "very pleased" with the ruling.
"It's a victory for fairness in the calculation of an important asset," said his lawyer, Bill Sammon.
The Bests, according to court documents, had a traditional relationship in which she took care of the cooking, cleaning and shopping, took responsibility for raising her children from a previous marriage and helped her husband with his school board campaigns. He, in turn, paid the bills.
Marlene Best, plagued by health problems, including a hysterectomy and back surgery, never held down a steady job during the marriage.
Ted Best failed in his argument that he shouldn't have to give his former wife a lump sum but should pay benefits as he receives them.
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