Webinar on the Administration of Pension Benefits Upon Marriage Breakdown Guidance

Jennifer Rook
00:14    Hello, everyone. Welcome to our webinar, Pensions as Family Property: Highlights of new FSRA Guidance. I'm just going to wait a minute to let people log in and not have any issues.

Jennifer Rook
01:12    Okay. I think I've given everybody a bit of time. For those of you that don't know me, I'm Jennifer Rook, head of Pension Plan, Operations and Regulatory Effectiveness at FSRA. I'm your MC today and I was chair of the Family Law Technical Advisory Committee, which worked with FSRA extensively on preparing the new guidance, as well as the other materials which will be covered in the webinar today. Before I begin, I'd like to acknowledge the land we are on is the traditional territory of many nations, including the Mississauga of the Credit, the Anishinabek, the Chippewa, the Haudenosaunee, and the Wyandot people. And is now home to many diverse First Nations, Inuit and Métis people. We acknowledge that Toronto is covered by Treaty 13, the Mississaugas of the Credit.

Jennifer Rook
02:00    For our presenters today, we have Anne Slivinskas, Senior Legal Counsel at FSRA; myself; Jesse Heath Rawlings, and Hae-Jin Kim, both of whom are senior policy advisers at FSRA. All of our presenters today have significant expertise in the area and have dedicated countless hours to the material to being covered today in the webinar. I'm just move to the housekeeping. So a few notes to ensure that we don't experience any issues in the call today. We are on MS Teams Live events, as an attendee or audio and video have been automatically disabled. If you have any questions, we ask that you wait until the question and answer session at the end of the presentation. At that point, you can direct your questions to us through the moderated Q&A icon at the top right hand side of your screen. I'd also like to remind you that today's webinar is being recorded. A copy of the recording and transcript and today's presentation deck will be posted to FSRA's website in the weeks following the event. I hope you find today's webinar informative. And let's begin.

Jennifer Rook
03:10    The slide four, please. I'm just going to run briefly through the agenda. We'll start by reviewing the broader pension and family law context, Jesse will speak to FSRA's regulatory role and review the new resources that FSRA has developed and recently released. Remainder of the webinar will highlight specific topics covered in the new guidance and will be led by Anne and Hae-Jin. Please note that this session is intended to profile the new resources released by FSRA and assumes participants have a foundational level of knowledge in the areas of pensions and family property. The session is not intended to be an introduction to pensions or family law. Now, let's skip to slide six, please. So as many of you know, in 2012, significant legislative changes governing the valuation and division of pensions in a marriage breakdown are introduced by the government. Key changes included a valuation formula prescribed in the Pension Benefits Act, as well as prescribing processes and forms for valuation and settlement. These changes have now been in effect for about 10 years, while many stakeholders generally agree that they made an overall improvement. As with any reforms, issues have arisen. With the launch of FSRA, family law was identified by stakeholders as an area of recommended focus. As a result, FSRA established a Special Purpose Technical Advisory Committee to assist with the development of business approach and development of new guidance and the other resources in this area being released. I'll now turn things over to Jesse to speak to his role as a regulator in this area.

Jesse Heath Rawlings 
04:56    Hi, everyone. And thanks, Jen, for providing that introduction and background. And let's go to the next slide here, please. Before we get into discussing the outcomes of the Technical Advisory Committee and the new resources that FSRA has released, I wanted to take a just a minute to go over FSRA's role with respect to the regulation of family law matters, as that really provides the background to what FSRA has been able to do in that space. As we all know, FSRA is the pension regulator and as the regulator FSRA's basic role is to administer and enforce the PBA and its regulations. In the area of family law specifically, there are few tools that FSRA may use to do this. So first, FSRA may issue guidance to the sector, and guidance may, for example, provide FSRA's interpretation of the PBA or its regulations with respect to a specific issue. FSRA also has the power under the PBA to create and approve the family law forms that are used by administrators and members, and we'll discuss some of the recent updates to the forms in just a minute.

Jesse Heath Rawlings
05:57    FSRA also has a rule making power over certain areas of family law, and I'll discuss a bit more about what that means shortly. But perhaps more important to understanding FSRA's role in this area is what FSRA does not have the power to do. And specifically, FSRA does not have the ability to amend the underlying legislation and regulations that established the family law framework for valuing and dividing a pension. The power to amend the statutes and regulations, specifically the Pension Benefits Act and the Family Law Act rests with the government. And so that means, for example, that FSRA can't change the basic requirements of the family law regime, such as how the application payment and division process works or the key responsibilities of different stakeholders. It also means that FSRA can't alter how a particular benefit is valued if the methodology for valuing that benefit is clearly set out in the PBA. Essentially, in other words, where the PBA sets out a clear course of action on an issue, FSRA doesn't have the power to change the rules, even if stakeholders believe an alternative approach could be better. And while we do pass on feedback that we hear to the Ministry of Finance, it's ultimately up to the government to decide whether to make legislative or regulatory changes.

Jesse Heath Rawlings
07:08    In this webinar will be discussing the resources that FSRA has created with an in-depth focus on the FSRA guidance that was recently released because this guidance cannot change the legislation or regulations, it focuses on issues that are within FSRA and scope and authority, meaning it often deals with areas where the underlying provisions are difficult to interpret and where we thought the guidance from FSRA could be helpful. Now, in terms of where rulemaking fits into all of this, rules on an important tool for FSRA because they derive their power from the PBA. And in this sense, they have the force of law, kind of similar to the regulation. But it's also important to understand that FSRA rulemaking cannot in and of itself override an existing statute or regulation, which means that in many cases, family law will making has to be coordinated with the repeal or amendment of regulations. So in that sense, it's a very different process than issuing guidance. FSRA has not yet used its rulemaking powers in family law. However, we're actively considering rulemaking in this area, and we'll provide a bit of an update on that at the end of this webinar. Let's go to the next slide, please.

Jesse Heath Rawlings
08:17    Now, having spoken about the role of FSRA, I just want to take a quick minute to go over FSRA's guidance framework. As I mentioned, the main resource that we'll be discussing today is FSRA guidance. And as you can see on the slide, FSRA can issue four different types of guidance, which we classify as interpretation, information, decision, and approach. And you can see on the slide a bit more of a description of each type. The main resource that we'll discuss today is the guidance that FSRA has released, titled the Administration of Pension Benefits on Marriage Breakdown, and that guidance is classified as both interpretation and approach. And that means, in other words, that it sets out both how FSRA approaches family law in terms of its expectation of administrators in FSRA's own internal processes and principles, as well as FSRA's interpretation of various areas of the legislation and regulations. Generally speaking, non-compliance with the FSRA interpretation may lead to enforcement action by FSRA. At the same time, however, it's also good to keep in mind that an interpretation by FSRA is not law, meaning that it's possible a court could ultimately come to a different conclusion on an issue. Let's go to the next slide here, please.

Jesse Heath Rawlings
09:27    Before we get more into the guidance document itself, I just want to take a moment to briefly highlight some of the other resources that have been updated and created as part of our engagement with the Technical Advisory Committee. And let's move to the next slide, please. First, FSRA has been working on its family law forms, including soliciting feedback from the Technical Advisory Committee to improve these forms for members and administrators. As part of this process, FSRA has refreshed the forms by removing certain requirements that were not specifically prescribed in the regulations. So, for example, the requirement to have the valuation application signed in the presence of a witness has now been removed. And the same with the requirement to provide certified copies of proof of dates of birth. We've also removed Form 7 from the menu of prescribed forms. This was an optional form for members who requested evaluation but did not plan on dividing the pension. And where it made sense, FSRA has also consolidated certain forms. So, for example, the valuation application has been consolidated from three forms into one form now, plus an optional appendix. We've also divided Form 6 to be more relevant to specific plan provisions, making a separate form to be used by retired members’ spouses whose plan offers the combined option pension, which is not available from those plans. The forms have also been generally redesigned to comply with AODA requirements and have been revised to be more accessible in plain language. They now range from about a grade five to grade seven reading level. At the same time, we've also removed the user guides for each form, as well as the Q&A is with the idea of having all relevant material that's needed by the user now contained on the form itself. Let's go to the next slide here, please.

Jesse Heath Rawlings
11:18    As another part of our work in the area of family law, we've also developed a plain language guide for members and their spouses who are going through a marriage breakdown. This is intended to be a basic and accessible step-by-step overview of the framework for valuing and dividing a pension. It assumes that the reader has no prior knowledge in the area, and while the guide is really drafted for members and their spouses, professionals who are less familiar with this subject matter might also find it useful just for a basic overview or a quick refresher. The guide includes some examples of members who are working through a division of assets on marriage breakdown and also has an appendix with the checklist to assist members and their advisors and working through the process. You can find this guide on FSRA's website. And we hope that you find it useful. I just want to take a moment to thank the Technical Advisory Committee members for all their input and insights in helping to develop these documents. Let's go to the next slide, please.

Jesse Heath Rawlings
12:16    I want to now just take a moment to introduce the guidance by giving a quick refresher on some foundational concepts, and let's move to the next slide here, please. So as Jen mentioned earlier, we're now in the post-2012 family law regime, where administrators are required to value the pension asset for members. And as a reminder, the process generally works as follows. So first, pensions are included in the definition of property in the Ontario Family Law Act, which means that they must be valued on marriage breakdown. This is part of the larger requirement under the Family Law Act that spouses must value and subject to some limited exceptions, equalize their net family property. The FLA and PBA require the administrator to provide the pension value to the member and spouse in order to support this process. Importantly, this requirement does not apply to common-law spouses who are not required under the FLA to equalize and that family property. However, as the guidance notes, common-law spouses may choose to value and divide their pension, and if so, a similar process will apply.

Jesse Heath Rawlings
13:21    
Now, second, and very importantly, while married spouses are required to value the pension, there's no requirement that they divide the pension. In the majority of cases spouses will agree as to whether or not the pension will be used to satisfy any equalization payment, or whether they'll instead equalize their net family property through a transfer of other non-pension assets. More generally, with respect to valuing and dividing the pension, you can think of the Family Law Act as the source of the requirement to value the pension and the source of the authority to divide the pension. It's the PBA that then picks up with the details on the process for valuation and division. This means that it's the PBA that provides guidance for determining how much the pension is worth and the minimum standards that apply when dividing the pension, such as the 50% limit on using the pension as part of an equalization payment. At the same time, however, it's also important to note that the PBA often defers to the Canadian Institute of Actuaries Standards of Practice with respect to how to value the pension and specifically Section 3500 of those standards, which deals with commuted values. So all in all, this means that this subject matter that we're talking about essentially involves the interaction of three different important sources of law and standards, specifically the Family Law Act, the Pension Benefits Act, and the CIA Standards of Practice. This reviews the interaction of these three areas through the lens of the principles that FSRA follows relating to family law matters. And you can find these set out in Section 4 of the guidance. And they're also set out on the side in front of you. It's these principles that guide the resources that we've created, including the approach and interpretations that are set out in the guidance document. Let's go to the next slide here, please.

Jesse Heath Rawlings 
15:07    So in just a moment, I'm going to turn it over to Anne Slivinskas for an in-depth discussion of the contents of the guidance. But I wanted to say just a few words about the guidance more generally first. So first, the guidance is intended for plan administrators and other professionals. It's not a member-facing document, and it's really meant for dealing with technical issues and questions that have been identified as key areas of concern in the sector and that are within FSRA's scope and authority. In line with FSRA general approach to guidance of this type, it assumes a basic understanding of the legislative and regulatory framework and tries to focus directly on these issues. So for that reason, you've all signed a basic overview of the family law regime in the guidance, and for that, you may want to take a look at the guide for members and spouses. Secondly, the document does not address all the issues that might arise with respect to family law, which, as we all know, is a very technical and complicated subject matter area. FSRA is a risk-based and principles-based regulator, which means we try to prioritize the areas that are most relevant to our objectives, which in the pension sector include good plan administration and safeguarding the rights and benefits of planned beneficiaries. Because the guidance cannot address every possible issue that may arise, it also sets out how FSRA generally approaches issues in family law by providing our guiding principles to assist professionals and considering how FSRA would likely deal with a particular issue or question. It also sets out FSRA's expectations as to how administrators will approach these issues when deciding on a course of action.

Jesse Heath Rawlings
16:36    As noted in Section 4 of the guidance, FSRA may accept it administrators practice it reflects the principles that we've set out in the guidance that is applied consistently and that find support in the PBA. By providing our guiding principles and some interpretations on important issues, our hope is that the guidance can still help professionals in working through the many possible technical issues that could arise, but that are not specifically addressed. At the same time, if FSRA becomes aware that further guidance is needed on a particular subject affecting many plans or plan members, we do intend to update the guidance. So that generally concludes our background discussion of the Technical Advisory Committee and the new resources. And I'll now pass it over to Anne Slivinskas for an in-depth look at the guidance. So thanks everyone and now over to you, Anne.

Anne Slivinskas
17:24    Thanks, Jesse. And next slide, please. My name is Anne Slivinskas, and one of my goals this afternoon is to provide you with an analytical framework to help navigate the process of valuing the pension property. The first step in the triage process is to determine the relevant jurisdiction. Let's take a look at slide 16. Whether you're a family lawyer or a plan administrator, one of the more complicated issues in this practice area is figuring out what to do with out-of-province separation agreements and court orders. Pension assets are to be valued based on the applicable family law legislation. This is often the jurisdiction in which the parties last resided together prior to separation. The legislation may direct how pension property is to be valued. For example, if a former member accrued benefits in Ontario and the spouses last place of residence prior to separation was Alberta, the Alberta Family Law Act would govern valuation of the family property, including Ontario pension benefits. If the former planned member doesn't need to divide the Ontario pension for equalization, that's the end of the story. However, if the former member does need to divide the pension, the division rules in the Ontario PBA would apply. These rules state that an Ontario valuation is a precondition to the division of an Ontario pension, and so this plan member will have to complete FSRA family law Form One and then complete the other division requirements in the PBA.

Anne Slivinskas
19:00    What if that same plan member belonged to a multi-jurisdictional plan and continue to accrue benefits after moving to Alberta? Step one of the analysis would be the same if the parties separated in Alberta, Alberta's family legislation would govern the valuation. The good news is that step two would be simplified. The 2020 agreement regarding multi-jurisdictional pension plans states that the member's entire benefit accrual is determined by final location. For example, if an Ontario plan member moved to Alberta and continue to accrue pension benefits in Alberta, then the pension would be both valued and divided in accordance with Alberta's family law rules and Alberta's pension division rules. Next slide, Maggie.

Anne Slivinskas
19:51    So once you figured out that Ontario valuation rules apply, the next question in the decision tree is which set of Ontario rules apply? The PBA and Family Law Act were amended effective January 1st, 2012. The new rules apply to any orders, agreements, or arbitration awards that were executed after that date. The actual separation date is irrelevant, although 10 years have passed. FSRA still receives inquiries about whether it's possible to amend a pre-2012 agreement now so as to fall under the new rules. The motivation for such an amendment could be to access the lump sum payment option to the spouse. Section 3.4 of the guidance clarifies that if the 2012 agreement included an equalization of net family properties, the new pension valuation and division rules would not apply even if the agreement was amended now. Next slide, please. My trusted colleague, Hae-Jin Kim, will now highlight some of the key evaluation issues.

Hae-Jin Kim
21:03    Thanks, Anne. I'll be going over valuation guidance highlights. Let's move to the next slide, please. You'll recall that plan administrators are required to calculate the value of the pension that accrued during the spousal period. This calculation is commuted value based. That's why Section 3, sub 2 of Regulation 287-11 requires the preliminary value of defined benefits to be calculated in [chorus?] with Section 3500 of the CIA Standards of Practice and not Section 4500. Therefore, any changes to the standards that apply when calculating commuted values will also apply to the calculation of the family law value. This is what occurred last year when the Actuarial Standards Board amended Section 3500 of the Standards of Practice, which revised the standards for calculating pension commuted values. When deciding which version of the Standards of Practice applies in selecting the assumptions and methods for a family law valuation, administrator should apply the Standards of Practice that were in effect on the family law valuation date. Please note that this is a change from fiscals, FSRA's predecessor direction, which was to apply the Standards of Practice that were in effect as of the date the administrator received a completed application for family law value. What this means is that the standard is a practice that came into effect on December 1st, 2020 should only be used if the family law valuation date occurred on or after that date. However, if the family law valuation date is a date before January 1st, 2012, which was the date when the new family law regime came into force, the version of Section 3500 in effect by January 1st, 2012 applies. Next slide, please.

Hae-Jin Kim  
22:47    I should mention in the previous slide, Regulation 287-11 provides that the preliminary value of defined benefits should be determined using methods and actual assumptions that are consistent with Section 3500 of the standards of Practice. In the event of a conflict, requirements under Regulation 287-11 prevail. Under the revised CIA Standards where a terminated member is entitled to a subsidized early retirement pension, a cumulative value is calculated using retirement age assumption, based on a 50/50 assumption where there's a 50% probability of retirement on the date that results in the highest commuted value and a 50% probability of retirement on the earliest date the member will be entitled to reduced retirement benefit. Prior to December 1st, 2020, community values were calculated using-- or by assuming a 100% probability that retirement will occur at the date that will result in the highest commuted value. As you can see from the table, the 50/50 assumption only applies to members who are already terminated on their family law valuation date and the family law valuation date occurs on or after December 1st, 2020. Next slide, please.

Hae-Jin Kim  
24:04    Actuaries and administrators have also requested clarification on two other valuation matters: married assumptions and purchase pension credits. Regulation 287-11 requires that the value of the pension must be determined as if the member had terminated it from the pension plan on the family law valuation date. As noted in the example from married assumptions, the same assumption for commuted value calculations on termination should be used for primary value calculations. The second matter that we've identified deals with the purchase pension credits or pension buybacks, which applies mostly to members of public sector plans. At the end of the day, what gets included in the family law valuation is a pension benefit that was credited to the plan member during the spousal period. It doesn't matter if that credit was added because of service accrual during the marriage or as a result of the purchase of credit during the marriage using family assets. Any service or entitlement accrued up to the family law valuation date as a result of the buyback will be included in the preliminary value. However, any buybacks still pending after the family law valuation date will be excluded from the calculation, as those purchases were not yet made as of the family law valuation date. Next slide, please. Now back to you, Anne.

Anne Slivinskas
25:25    Thanks, Hae-Jin. Multiemployer pension plans or MAPs face a unique valuation challenge. Unlike other types of pension plans, MAPs are permitted to retroactively reduce accrued pension benefits. Family lawyers may ask themselves, "How can this feature be reconciled with valuation rules, which provide that preliminary value must be determined A) as if the member had terminated membership on the valuation date, B), in accordance with the plan terms on the valuation date, and C), without consideration of future salary benefits or changes to the plan?" Given the requirements to complete the calculation as if the member had terminated on the separation date, FSRA believes it's appropriate for the administrator to produce the preliminary value, but only if the plan terms in effect on the valuation date explicitly provide for a reduction of the member's benefits on termination, and the member was eligible for a commuted value payment if they terminated on that date. Next slide, please.

Anne Slivinskas
26:28    Transfers. The guidance tackles who is responsible for calculating the family load value in situations where the plan members separated, then transferred the plan membership and assets to another pension or locked-in account before applying for evaluation. While the administrator of the plan that the member was in where they separated generally remains responsible for providing the calculation, it really does depend on the type of transfer. See Section 7.7 of the guidance for more details. As noted on the slide, it's important to note that regardless of who completes the calculation, it must be done in accordance with the terms of the plan the member was in when they separated. And the limit on the maximum amount that can be transferred is also calculated under the original plan terms. Next slide please, Maggie.

Anne Slivinskas
27:23    So that completes the high-level overview of the valuation issues that are addressed in the guidance. Moving on now to thorny pension and division issues. Recall that there is no legislative requirement for a member to divide the pension, but division is an available option to satisfy equalization obligations. The form of division depends on the member's status in the plan on the family law valuation date. Pre-retirement separation, lump sum transfer is the only option; post-retirement separation, pension division is the only option. With that foundational framework in mind, let's take a look at slide 25. The Technical Advisory Committee considered revisions to the way that interest is calculated on lump sum payments and the way that arrears are calculated for pension division. Ultimately, FSRA's guidance on these two issues has not changed. For lump sum payments, administrators should continue to add interest where the lump sum is expressed as a percentage or a proportion of the family value. However, if the payment is expressed as a specified dollar amount in the separation agreement or the court order, administrators have no authority to add interest unless the settlement instrument expressly required that it be added.

Anne Slivinskas
28:46    Arrears. The rules governing division and revaluation of a retired member's pension contemplate division commencing as of the separation date. Since parties never have a signed separation agreement or a court order on the same day as they separate, this pension division rule will almost always result in arrears owing to the spouse if they're divided the pension. The regulations are very prescriptive and do not anticipate situations where parties have made arrangements to share the pension prior to the actual division or if a significant period of time has passed between the separation and the settlement. FSRA is aware that this creates challenges for both plan members and administrators. Hopefully, we'll be able to work together to find a solution that provides flexibility to spouses without creating undue burden to plan administrators. In the meantime, administrators should continue to revalue the retired member’s pension in accordance with Section 39 of the Family Law Regulation. Another pension division problem is the question of what to do where the pension is being divided but the spouse predeceased is the retired member. The Ontario Court of Appeal has confirmed that the PBA does not preclude a continuation of equalization payments to the spouse's estate in the event that the spouse dies before the retired member. FSRA is still considering whether such payments are to continue to the spouse's estate in situations where the agreement does not expressly say that is to occur. In the meantime, best practice is to document the parties’ intentions in the settlement instrument.

Anne Slivinskas
30:25    Moving on to change in member status on the next slide. The member status on the valuation date determines the payment options that are available to the spouse. Recall that if a member was either active or deferred vested on the date of the separation and decides to use the pension for equalization, the only option available is a lump sum transfer. This is true even if the member's status in the plan has changed from active to retired in that interim period, and they start receiving pension payments before finalizing the terms of the separation agreement. The regulations don't expressly address how to revalue the retired member’s pension in this situation. Section 8.5 of the guidance confirms that it would be appropriate for the administrator to transfer the lump sum to the spouse's locked-in account in accordance with the settlement instrument and the spouse’s lump sum transfer application form, and then adjust the retired member's pension by reducing the future pension payments. The guidance recognizes that the PBA may support other interpretations of the payments and revaluation provisions, but a word of caution: should an administrator elect a different interpretation that reduces the amount that's available for transfer from the plan to the spouse, it must include appropriate disclaimers on the statement of family law value. Specifically, the administrator should advise plan members and their spouses that the amount available for transfer on the statement will decrease if the member retires before the lump sum settlement is made. In that circumstance, the member would be personally responsible for paying any shortfall in the equalization payment to the spouse. Next slide, please.

Anne Slivinskas
32:20    The guidance doesn't address entitlement to spousal survivor pensions, but it does provide an update to the thorny issue of post-retirement spousal waivers. Next slide, please. The PPE states that have spousal survivor pension vests upon the retirement of a plan member, as of that date, the survivor pension becomes a vested contingent entitlement. The pension valuation and division section of the PBA also states that a spouse can waive this entitlement if the parties separate after retirement. This is a significant financial decision for the spouse. Further, the waiver provides little or no financial benefit to the member under the terms of most pension plans. So both parties need relevant information to make informed decisions. As a result, the guidance has been updated and the preconditions for a valid waiver now are, before waving, the parties must apply for a statement of family law value. This will ensure that they appreciate the value of the survivor benefit that's being waived. The parties must complete family law Form 8. This form has also been updated. The waiver itself is signed by the spouse, but there's now a new requirement for the member to acknowledge that the spouse is waived. It's important to note what is not required. Post-retirement death benefit waiver does not require the member to divide the pension. The waiver is not part of the equalization process. Finally, it's not necessary to formally incorporate the waiver into the settlement instrument. But of course, this is good practice and best practice. And that completes the overview of the guidance highlights. There's much more in the document, and I do encourage you to read it carefully. I'll pass the virtual mic to Jen Rook to set out next steps. Next slide, please.

Unknown  
34:33    Jennifer, you're on mute.

Jennifer Rook
34:38    Thank you. And before I move into the official question and answer session, I'm going to kind of touch on a few questions that we typically receive. Let's go to slide 30, please. So fiscal policies and questions and answers will continue to be available on the FSRA website for reference purposes. Please note that these documents would be considered inactive and inactive policies will no longer be updated and should not be assumed to be FSRA's current position or interpretation. Next slide, please. Jesse referenced rules earlier, and this is just sort of in terms of next steps, we will be starting to work next on rules in 22, 23. So next fiscal, that is on our agenda. While the work has not yet begun, examples of where rulemaking could be made would really focus on the proof documents that are needed, other application requirements. Our focus would likely be on the burden reduction in those areas where appropriate. Another example would be around fees. Next slide, please.

Jennifer Rook
35:51    So thank you to all of the speakers today. We've made great time. We're now going to move on to the question and answer session. I'm just going to go through a few logistics on this. You can direct your questions to us through the moderated Q&A icon at the top right hand side of your screen. To do so, please click the icon and type your question at the bottom of the page. If you want to remain anonymous, you can tick off the anonymous box. I'll read out the questions before having our speakers address them. I see people can use them because some have come in throughout the webinar. There's a lot of participants today, so I just want to caution you that it would be helpful if you focus your questions on types of questions that would be relevant to many participants, as opposed to very fact-specific questions. Those types of questions can be directed to us by email following the webinar, if you like. For questions that we don't get to in the session today, FSRA will follow up in one of two ways. Where the questions are applicable to the broader group here today or stakeholders generally, FSRA provide written responses that will be posted to our website. For questions with very specific facts, we'll follow up with the individual directly to ensure that we understand the facts before we're providing a response. I think we've acknowledged kind of throughout the webinar that this is a very nuanced area. So it's important that we understand the question and the facts involved before we provide an answer on the questions.

Jennifer Rook
37:29    We'll move over to the question and answer period. I just need it to load. I'm going to go to the first question that I see. And it's about CPP. So I'm going to ask Anne Slivinskas to respond to this. It says, "For the division of CPP upon divorce, if both parties agree, can one of the couple receive both his and her CPP payments, i.e. one got the house, the other gives up their CPP so it goes to the one who didn't get the house?"

Anne Slivinskas
38:11    Jen, so a CPP would be beyond the scope of FSRA's jurisdiction and it's not covered in the guidance. So if participants need information about that, they can check the CPP website. That's what I would recommend.

Jennifer Rook
38:29    Great, thank you, Anne. The next question I see here I will direct it to, I think, Jesse or Hae-Jin. "What is the FLV date if the request for a second FLV came months after the first family law valuation date?"

Hae-Jin Kim  
39:00    My understanding of the situation is that there's more than one family law valuation. In this case they kept more than one family law valuations, but if the parties are actually dividing the pension assets, then the final family law valuation date needs to be included in the final settlement instrument. So I'm not sure if I've answered the question, but yeah, there could be more than one family law valuation date. And in fact, in the application for family law value, spouses can choose two family law valuation dates if they can't decide on which date to use initially.

Jennifer Rook
39:41    Thank you, Hae-Jin. So we have a jurisdiction question. I'm going to turn it over to Anne. It says, "When we talk about multiple jurisdictions, if a participant lives in the US, would this apply? I mean, if he continues a career and service in the US?"

Anne Slivinskas
40:00    Thanks, Jen. My understanding is the agreement regarding multi-jurisdictional plans doesn't apply to the US and international questions are beyond the scope of our guidance. But I would suggest that the participant check with somebody that's got some conflict of laws experience.

Jennifer Rook
40:27    I have a forms question. I'll now turn it over to Hae-Jin. I'm reading it as it's supposed to say, "Can the fiscal forms only for Ontario or can they be used nationwide?"

Hae-Jin Kim  
40:43    Well, it only applies to members who have pension benefits that are subject to the Ontario Pension Benefits Act, so it could be like a plan that's registered, for instance, in Alberta but if they have a Ontario members in that Alberta plan, then our forms would apply. So as long as the pension benefit applies, Ontario Pension Benefit Act applies to the pension benefits, then FSRA's family law form should be used.

Jennifer Rook
41:14    There's a couple more on forms. I'm going to just continue on the theme, since maybe it'll all weave together. So this is around, I am assuming, the new forms. I'm going to read out two questions and then give Hae-Jin time to collect your thoughts and respond. "Can we now use the forms or wait for the updated ones in 2022?" And then the next question is, "When will the new forms be available?"

Hae-Jin Kim  
41:40    Well, the forms are currently available for use at this time. So you can either use FSRA form of the fiscal forms until April 30th, 2022. So they're both valid for use at this time. So they're available on the website. And there is a screenshot of what the forms-- of the forms page and where the family law forms are housed. It's on the slide deck. And the second question, Jen, about the forms?

Jennifer Rook
42:13    It was just about whether or not they were available and could they be used now?

Hae-Jin Kim  
42:18    Yes, they could be used now. And there's guidance on the Forms page about the use of either the fiscal forms of the FSRA forms until April 30th, 2022.

Jennifer Rook
42:33    "When can we expect FSRA to release its position on the Melosh versus Melosh Court of Appeal decision?" I can speak to that. So that is a decision that came up pretty recently. We're aware of it, and we are just taking some more time to review the legislative framework and the court case. I would say know we're taking a little bit of time. We really didn't want to hold up the release of the broader guidance because we've been working on this for quite some time as well as the forms and the member guide. So we were focusing on that and after this webinar will start to turn our minds to that section of the guidance, which currently has a placeholder surrounding this decision. So I'd say sometime early in the new year, I would say. Now just give me a minute. I need to read through the questions. And one of the questions again, I can fill this, "Will we get the slides?" These will be posted to the website as well the recording. I'm going to throw this one to Hae-Jin again, although, Anne, if you like to take it, feel free to jump in. "What is the recommendation now that the Form 7 is canceled?"

Hae-Jin Kim  
44:01    Parties should contact the plan administrator to find out what information that the administrator may need to close their files with respect to the pension matters. So if the pension is not going to be divided, then let the administrator know. They might just want a copy of your settlement estimate. We eliminate the Form 7 because there was confusion about the intended use of this form. Some were of the view that this form has something to do with waivers. So we're actually asked to eliminate this forms from the lineup of family law forms. Anne, did you have anything else to add to that?

Anne Slivinskas
44:36    Just a reminder, again, that the source of any requirement or authorization to divide the pension asset is the separation agreement or the court order. The fact that somebody's got their pension value doesn't necessarily mean that they are going to be dividing it, and there would be no legal reason to hold that, for example, a pension payment because of that. Again, though, it all depends on the administrators and their comfort. If they absolutely can reach out to seek confirmation but it is not a requirement. Hope that helps.

Jennifer Rook
45:22    Thank you, Anne. There's a question around common law, which I'll pass over to Anne. "What is the guidance for common law spouses? My understanding is that a family law valuation calculation is required if common law is three years or more, unless the common law spouse waives."

Anne Slivinskas
45:43    So the family law-- the property section of the Family Law Act, part one doesn't apply to common law spouses. Common law spouses do not share in the increase in family property during the spousal relationship. So there is no requirement to value the pension property, no requirement to value any property. Having said that, it does provide the option for common law spouses who wish to divide their benefits with that option. And for married couples that used to live together before they actually got married, if they would like to, they have the option of sort of expanding the spousal period by adding on the period that they lived together before they were married to the spousal relationship period that's used to value the pension. So just to recap, it's not a requirement to value that a pension asset if your common law that you can if you want to.

Jennifer Rook
46:54    I think this will be Anne again. "If the benefits are transferred to an importing plan from the prior plan under Section 42 after the family law valuation date, would you consider the importing plan to be a successor? Can the pension be divided based on a valuation from the prior plan, even though the family law valuation would be zero under the importing plan?"

Anne Slivinskas
47:21    Okay, that's a long question.

Jennifer Rook
47:24    Maybe this will be when we have to follow up.

Anne Slivinskas
47:27    Yeah, we might need to take a look at Section 7.7 of the guidance. If it's a Section 42 transfer, that means somebody has terminated. They've gotten their term options. They have elected either to get an annuity, a commuted value, or it's been transferred to another plan. So our guidance indicates the original plan is not responsible because there is a discharge under Section 42-11, I believe, but perhaps it would be best to follow up in writing with that one.

Jennifer Rook
48:08    This one's a shorter question. It's about about MAPs, "Did I understand correctly that it's now permissible to apply the transfer ratio to a family law valuation date for MAP?" Throw it to Anne.

Anne Slivinskas
48:27    Okay. Again, that is something that we covered in the presentation, and I'm just taking a look to see which section of the guidance it's in. It's in Section 7.4. Yes, you can reduce the preliminary value by the transfer ratio. But again, there's two conditions to keep in mind: the provision that requires or allow the reduction had to be in the plan terms on the family law valuation date. So that's the first precondition. The second precondition is it actually has to say if you terminate the value of your benefit, your commuted value is reduced by the transfer ratio. And then the other requirement is that on that day, the plan member actually had to be entitled to a termination benefit. So I think that's all outlined in the guidance of Subsection 7.4. Hope that clarifies.

Jennifer Rook
49:34    I have a FSRA jurisdiction question. Perhaps Hae-Jin can respond to this. "Are DPSPs, RRSPs outside of FSRA jurisdiction for family law?"

Hae-Jin Kim  
49:49    Yes, it's outside our jurisdiction. So our FSRA family law forms won't apply.

Jennifer Rook
50:02    "Can the ex-spouses make mutually agreed upon changes to their separation agreement if they find it to be in their mutual advantage after this new rule takes effect?" Throw that to Anne.

Anne Slivinskas
50:18    It sounds like that's a question regarding the transition rules. So it all depends, I guess, when the original agreement was signed and if the original agreement was before 2012. And if the original agreement actually already provided for an equalization payment, you can amend your agreement, but that will not result in the application of the new rules. So hopefully that answers the question.

Jennifer Rook
50:57    So we have a question sort of around [Melosh?], which I'll turn to Anne as well. "Will FSRA have any suggested precedent language to give effect to the party's intention to have pension benefits continue to be paid to the estate of the predeceased spouse of the plan member?"

Anne Slivinskas
51:22    Just to clarify. The question there is, will we have precedent language?

Jennifer Rook
51:28    Yes, I think that's probably the question.

Anne Slivinskas
51:31    I don't know, Jen, are we going to have precedent language?

Jennifer Rook
51:35    I mean, will we release exact language? No. We just don't see that as our role. But I mean, I think what we do know from that decision is that the court did say that it's important to include language to make clear what your intention is, but we will not kind of release boilerplate language that we think you should be using. Give me a moment here, I need to read the questions. "Where is the best place to access all new FSRA family law forms? Can fiscal form still be used or do we have to use the new forms?" I think we've actually addressed that one. But generally speaking, both sets of forms are on the website today, so you could go look at them to there.

Jennifer Rook
52:34    Okay. I'm going to go to a jurisdiction question to see if I can get it-- put Anne on the spot a little bit. "If a member accrues a pension in Ontario and separates in Alberta, who is responsible for preparing the valuation based on Alberta rule?"

Anne Slivinskas
52:52    Um--

Jennifer Rook
52:52    Oh, sorry. "Is it based on Alberta rules?" It's the question.

Anne Slivinskas
52:58    Again, it all depends on whether-- it all depends on whether the member continued to accrue in Alberta and whether you're are actually dividing it. So again, if you're moving, if you're an Ontario member, moved to Alberta, you would use the first step when you try to figure out how do you value things if your last domicile was in Alberta, you used the family law rules in Alberta for the valuation. So step one would be valuation in accordance with Alberta's rules. That would be it if you're just valuing it. If you're not going to be dividing it, that's where you would end. If you needed to divide it, that's when you would need to-- and you're not under the multi-jurisdictional agreement, that's when you would need to circle back up to Ontario because Ontario division rules say that an Ontario valuation is a precondition. So I'm not sure if that answers the question, but there is-- the technical guidance does review it in a little bit more detail. Hopefully, that will clarify.

Jennifer Rook
54:25    Okay, I think we'll move back to-- there's a few more around forms. "Hi there. Can you clarify if we require certified copies or if this is something that has been removed or will be removed?" Perhaps Hae-Jin can speak to that.

Hae-Jin Kim  
54:40    Certified copies for proof of dates of birth will no longer be required on the FSRA forms, but we still require certified copies for proof of the period of spousal relationship. So for proof of the starting date of the relationship, as well as the family law valuation date still has to be certified copies.

Jennifer Rook
55:05    The next question is around forms. I'll let Anne or Hae-Jin decide who wants to take it. It's around the waiver. "Can you review the post-retirement waiver in FLV? I'm unclear on what is the responsibility of the plan administrator at the time of pension commencement if an FLV has been requested."

Anne Slivinskas
55:33    So this is a question of post-retirement spousal waiver?

Jennifer Rook
55:40    Yes.

Anne Slivinskas
55:43    Did it specify in the question whether the parties are waiving?

Jennifer Rook
55:51    No. Maybe just review broadly around the form, which you did touch on in the presentation.

Anne Slivinskas
55:59    So it's possible for parties to waive an entitlement to survivor benefit before retirement if they retire and then separate, the PBA does allow the spouse to waive entitlement to the survivor benefit. There are some preconditions, though. The first one is you need to actually get the family law value statement done. The second thing is you actually need to complete the waiver form before any division of the pension. The waiver form requires the spouse to waive. It also requires an acknowledgment to be signed by the plan members so that both parties aware that the benefit is being waived. It is not necessary for the waiver to be incorporated by reference in the separation agreement or the court order. It's also not necessary for the parties to go through, I guess, a pseudo-equalization where one member says, "I will pay you $1 of my pension in consideration." So you don't have to actually divide the pension. You do have to sign the waiver. You do have to get the family valuation statement completed.

Jennifer Rook
57:24    I see there's an active policy question, which I think, hopefully, Jesse can respond to for us. I mean, it's a broader question than just this topic, but it says, "Some fiscal policies have not been adopted or deemed inactive by FSRA, example, early retirement windows. How should these policies be treated?"

Jesse Heath Rawlings
57:48    Sure. So a lot of the old fiscal policies have now been moved to FSRA's website and marked as an inactive. Generally, you should think of inactive policies as still potentially being helpful in terms of providing guidance on what the regulator has previously thought. But they don't necessarily reflect FSRA's current position. So it's sort of use with caution. You probably, when looking at them, want to think about whether there's an active FSRA policy that covers the same subject matter, in which case that would definitely take precedence. But we've kept the inactive policies on the website in the hopes that they can still be of assistance to people, but they just shouldn't be taken to be our current policy and they won't continually be updated.

Jennifer Rook
58:40    So I'm going to throw it back to Hae-Jin on forms again. There just seemed to be a lot of questions continuing to come in on the forms, which is why I'm revisiting the forms quite a bit. It says, "When does it take effect requests received within the next few weeks, what form should be sent? The revised forms will be--" then this is the question. "The revised forms will be available on FSRA's site?" So yes, we've said that. But, Hae-Jin, perhaps you could speak to the next couple of weeks question.

Hae-Jin Kim  
59:12    I've not seen that question on my screen, but both fiscal and FSRA forms may be used until April 30th. As of May 1st, 2022, fiscal forms cannot be used. Does that answer the question?

Jennifer Rook
59:32    Yes. And so I think that's probably it for now. We've gone through 30 questions. So thank you. There are actually quite a few remaining. So we will have to spend the next little bit-- I don't want to give an exact time commitment because there's quite a few still remaining. We will spend the next period of time reviewing the questions that remain with us. As I mentioned, in the event you have a very fact-specific question, we'll follow up with you directly. If you've got kind of a broader one that we can easily answer and will be helpful for a variety of stakeholders, we will publish those ones to the FSRA website. If you have additional questions as we work through the new guidance, you're welcome to submit further questions to FSRA in writing, and we will respond to you that way. So with that, I thank you all for your time, for your participation. It's great to see the number of people that joined our webinar today. We're thrilled with the attendance and it looks like we have a little bit of work to continue to do on the questions. Thank you.