In response to Ontario’s new regime for dividing pensions on marriage breakdown, which permits the former spouse of a plan member to receive an immediate payment of his or her share of the member’s pension and requires plan administrators to calculate the value of the pension, the Financial Services Commission of Ontario (FSCO) has released draft versions of the prescribed forms that must be used in the pension division process.
These forms are to be used by plan members, their spouses/former spouses and plan administrators during most of the steps in the process. For example, there are forms for:
- applying to the plan administrator for the “imputed value” or “family law value” of the pension;
- the administrator advising the applicant if an application is incomplete;
- providing a statement of the imputed value of the pension to the applicant — there are different versions of these forms depending on the type of plan (e.g., defined benefit or defined contribution) and the status of the member (e.g., active or retired); and
- requesting the plan administrator to transfer a former spouse’s share of a pension or to divide a retired member’s pension, or to advise that there will be no pension division.
One form that appears to be missing is a form for the plan administrator to advise the member and the former spouse of the completion of a pension transfer or division, which could include information such as the amount transferred to the former spouse and the amount of the member’s adjusted pension going forward.
While FSCO has indicated that the forms may be amended between now and the December 31, 2011 deadline, they have also stated they do not expect to make any “material changes” to the forms.
To provide plan administrators and members with further guidance, FSCO has posted instructions and questions and answers related to the forms. FSCO has also indicated that they are in the process of developing additional materials, including questions and answers that will clarify transitional issues.
We’ll discuss these forms further and, more generally, the practical implications of the new pension division regime for plan administrators at an upcoming webinar on Wednesday, November 9, 2011. For more information, please contact Vaughna Mackenzie at firstname.lastname@example.org.