Archived Content
The following content was archived on the dates provided.
It is available for historical reference.
Archived on November 21, 2016
Q500. How should interest rates be determined for purposes of preliminary value (i.e. family law) calculations?
A500. Consistent with section 3 of Ontario Regulation 287/11 (Family Law Matters), for purposes of preliminary value (family law) calculations, interest rates must be determined using the Canadian Socio-Economic Information Management system (CANSIM) series V122515 and methods that are outlined in section 3540.02 of the Canadian Institute of Actuaries’ Standards of Practice [New Window] that are applicable on the Family Law Valuation Date (FLVD), and the assumptions described in section 3540.
Specifically, if the FLVD is:
- on or before January 31, 2011, the reported CANSIM rates should be determined with a lag of two months;
- on or after February 1, 2011, the reported CANSIM rates should be determined with a lag of one month. -08/2016
Archived on August 19, 2016
Q500. How should interest rates be determined as of January 1, 2012?
A500. Interest rates must be determined using the Canadian Socio-Economic Information Management system (CANSIM) series V122515 and methods that are outlined in section 3540.02 of the
Canadian Institute of Actuaries’ Standards of Practice ![[New Window]](/Style%20Library/FSCO/Internet/Images/icons/external.png "open new window")
(2010 version) that are applicable on the Family Law Valuation Date, and the assumptions described in section 3540. Specifically, if the Family Law Valuation Date is on or before January 31, 2011, the reported CANSIM rates should be determined with a lag of two months. If the Family Law Valuation Date is on or after February 1, 2011, the reported CANSIM rates should be determined with a lag of one month. -08/2012
Q1003. Effective January 1, 2012, section 3500 of the Canadian Institute of Actuaries’ Standards of Practice must be used to calculate the Preliminary Value. How should the Preliminary Value be calculated if the Family Law Valuation Date (separation date) is before January 1, 2012?
A1003. In FSCO’s view, section 3(2) of
Ontario Regulation 287/11 requires that section 3500 of the
Canadian Institute of Actuaries’ Standards of Practice (2010 version) be applied when calculating the Preliminary Value, regardless of the Family Law Valuation Date. This means that the methods and actuarial assumptions in section 3800 of the Canadian Institute of Actuaries’ Standards of Practice or in any older version of standards of practice should not be used, even if the Family Law Valuation Date is a date before January 1, 2012. -08/2012
Q1004. How should mortality rates be determined as of January 1, 2012?
A1004. Mortality rates must be determined using the demographic assumptions outlined in section 3530 of the
Canadian Institute of Actuaries’ Standards of Practice (2010 version). Specifically, if the Family Law Valuation Date is on or before January 31, 2011, mortality rates equal to the UP-94 Table projected forward to the year 2020 using mortality projection Scale AA should be used. If the Family Law Valuation Date is on or after February 1, 2011, mortality rates equal to the UP-94 Table with generational projection using mortality projection Scale AA should be used. -08/2012
Archived on June 5, 2015
Q501. A former spouse of a member or former (deferred vested) member is entitled to receive his or her share of the Family Law Value as a lump sum. When interest is paid on this lump sum, will it reduce the member’s or former member’s accrued pension entitlement under the plan?
A501. No. A former spouse’s interest in a pension fund arises on the parties’ Family Law Valuation Date (separation date). When the former spouse’s lump sum is paid out of the pension fund, it is paid with interest from the Family Law Valuation Date to the beginning of the month in which the lump sum is paid. The interest reflects the fact that the lump sum payable to the former spouse of a member or former member remained in the pension plan, earning interest . The payment of the interest does not reduce the member’s or former member’s accrued pension entitlement under the pension plan. -02/2014
Archived on March 19, 2015
Q15.3. Must a pension plan always pay interest to a former spouse of a member or former member when his or her share of the Family Law Value is paid out of the pension plan as a lump sum?
A15.3. Yes. Section 30 of Ontario Regulation 287/11 provides that lump sum payments must be credited with interest, from the Family Law Valuation Date (separation date) to the beginning of the month in which the lump sum is paid to the former spouse. This requirement to credit interest applies whether the former spouse’s share of the Family Law Value is specified as a dollar amount, or as a percentage of the Family Law Value in the parties’ settlement instrument (court order, family arbitration award, or domestic contract) and regardless of the terms of the settlement instrument. A settlement instrument cannot override the requirements of the Regulation.
The rate of interest for defined benefit plans is the same rate that is applied to calculate the preliminary value of the pension benefits or deferred pension. For defined contribution plans, the rate of interest is calculated at such rate of return as can be reasonably attributed to the member’s or former member’s individual account (i.e. reflects the actual gain or loss of the individual account). See sections 30(5) and 33 of Ontario Regulation 287/11. -02/14
Q46. Must pension assets be divided on the breakdown of a spousal relationship?
A46. The division of pension assets on the breakdown of a spousal relationship is not mandatory under the current rules in the Pension Benefits Act, nor will it be mandatory when the new rules come into effect. -06/11
Q47. Must pension assets be included in family property for purposes of equalization of net family property under the Ontario Family Law Act?
A47. Under the Ontario Family Law Act (FLA), the value of married spouses’ pension assets must be included in family property for purposes of the calculation and division of net family property. However, there is no requirement under the FLA for common-law spouses to divide net family property (including the value of any pension assets) on breakdown of their spousal relationship. This will not change when the new rules come into effect. -06/11
Q48. How do the new family law provisions of the Ontario Pension Benefits Act (PBA) apply to Ontario employees of federally regulated pension plans?
A48. Section 10.1(2) of the Ontario Family Law Act (FLA) provides that federal pension plan assets must be valued, “where reasonably possible”, in accordance with section 67.2 of the PBA with “necessary modifications”.
Ontario employees of federally regulated pension plans are subject to the federal
Pension Benefits Standards Act, 1985 (PBSA) . The plan administrator must comply with the minimum legislative standards under the PBSA relating to vesting rules, transfer options, the maximum amount that may be assigned or paid to the former spouse, etc.
Archived on December 14, 2012
Q40. A terminated member has made an election to transfer the commuted value of his pension to his locked-in account. Because the pension plan has a transfer ratio of 70%, 70% will be transferred immediately and the remainder will be transferred in 5 years. Our reading of 2.1(4) of Ontario Regulation 287/11 (Family Law Matters), as amended by Ontario Regulation 467/11, is that the person is not a “former member” for purposes of the regulation. How do we calculate the Family Law Value?
A40. The person in this situation should be treated as a deferred member when determining the Family Law Value of the 30% of the commuted value that remains in the pension plan. The definition of “former member” should not be interpreted in a way to exclude this class of plan member. -12/11
Archived on August 17, 2012
Q15. Effective January 1, 2012, section 3500 of the Canadian Institute of Actuaries Standards of Practice must be used to calculate the Preliminary Value. What must be used if the Family Law Valuation Date (separation date) is before January 1, 2012?
A15. In FSCO’s view, section 3(2) of Ontario Regulation 287/11 requires that section 3500 of the Canadian Institute of Actuaries Standards of Practice must be applied when calculating the Preliminary Value, regardless of the Family Law Valuation Date. This means that section 3500 applies, even if the Family Law Valuation Date is a date before January 1, 2012.
For example, if the Family Law Valuation Date is in 1996, the interest rates must be determined using the methods and CANSIM series outlined in section 3500 in effect at the Family Law Valuation Date in 1996. Those same rates will be used to update the Family Law Value to the date of transfer. Similarly, the mortality table used must also be in accordance with section 3500. -03/12