Archived Content
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Archived on January 13, 2021
Q1010. Effective December 10, 2015, section 2(3) of Ontario Regulation 287/11 was amended to reference the March 31, 2015 version of section 3500 of the Canadian Institute of Actuaries Standards of Practice, instead of the June 3, 2010 version. How does this amendment affect how Family Law Values are to be determined?
A1010. Section 67.2(1) of the Pension Benefits Act (PBA) provides that preliminary values must be determined “in accordance with the regulations and as of the family law valuation date of the member, former member or retired member and his or her spouse”. Since the PBA governs how a plan administrator must determine the preliminary values and provides that the plan administrator must do so “in accordance with the regulations”, the amendment to section 2(3) of Regulation 287/11 changed the basis upon which preliminary value calculations must be determined from the June 3, 2010 version of section 3500 of the Canadian Institute of Actuaries Standards of Practice (2010 Standard) to the March 31, 2015 version (2015 Standard), effective December 10, 2015.
Section 67.2(8) of the PBA provides that the plan administrator must calculate the Family Law Value (imputed value) once the plan administrator receives a complete Application for Family Law Value (FSCO Family Law Form 1). This means that:
- if the complete Application was received before December 10, 2015, the calculations must be determined using the 2010 Standard;
- if the complete Application was received on and after December 10, 2015, the calculations must be determined using the 2015 Standard. -08/2016
Q1011. A plan administrator is in receipt of a complete Application for Family Law Value (FSCO Family Law Form 1) and is ready to calculate the Family Law Value (imputed value). Is the Family Law Valuation Date relevant to determining which version of the Canadian Institute of Actuaries Standards of Practice must be used?
A1011. No. The key factor to consider when determining which version of section 3500 of the Canadian Institute of Actuaries Standards of Practice (CIA SOP) to apply when calculating a Family Law Value (imputed value) is the date on which the plan administrator receives a complete Application for Family Law Value (FSCO Family Law Form 1). The Family Law Valuation Date (FLVD) is not relevant when making this determination.
Although there is reference to the FLVD in section 67.2(1) of the Pension Benefits Act (PBA), the PBA does not require that preliminary values be determined in accordance with the version of the CIA SOP that would otherwise be in effect on the FLVD. The reference to the FLVD is not intended to indicate what version of the regulations a preliminary value calculation must be based on, but to indicate the effective date of calculation of the preliminary value. This in turn must be determined in accordance with the regulations in effect on the date the plan administrator performs the calculation. -08/2016
Q1012. What mortality tables must be used for purposes of family law calculations?
A1012. The Family Law Valuation Date (FLVD), as defined in the Pension Benefits Act (PBA), is the actuarial valuation date under section 3500 of the Canadian Institute of Actuaries Standards of Practice (CIA SOP). Therefore while the PBA itself does not directly require that the economic and demographic assumptions (including mortality rates) to be applied for purposes of family law calculations stem from the valuation date/FLVD, the CIA SOP do. Therefore, if a complete Application for Family Law Value (FSCO Family Law Form 1) was received by the plan administrator on or after December 10, 2015, the March 31, 2015 version of the CIA SOP (2015 Standard) applies, and the economic and demographic assumptions as of the FLVD must be determined in accordance with the 2015 Standard. Accordingly, for purposes of family law calculations, the following mortality tables must be used:
On or before December 9, 2015 | UP94 (generational): mortality rates equal to the UP-94 Table with generational projection using mortality projection Scale AA must be used. |
December 10, 2015 to December 31, 2016 | CPM2014 (CPM-B1D2014 or CPM-B): CPM2014 mortality rates with either the one-dimensional or two-dimensional improvement scale (CPM-B1D2014 or CPM-B respectively) must be used. |
On or after January 1, 2017 | CPM2014 (CPM-B): mortality rates CPM2014 combined with mortality improvement scale CPM-B scale must be used. |
If a complete Application for Family Law Value (FSCO Family Law Form 1) was received by the plan administrator before December 10, 2015, the June 3, 2010 version of the CIA SOP (2010 Standard) applies, and the economic and demographic assumptions as of the FLVD must be determined in accordance with the 2010 Standard. Accordingly, for purposes of family law calculations, the following mortality tables must be used:
Prior to February 1, 2011 | UP94 (2020): mortality rates equal to the UP-94 Table projected forward to the year 2020 using mortality projection Scale AA must be used. |
February 1, 2011 to December 9, 2015 | UP94 (generational): mortality rates equal to the UP-94 Table with generational projection using mortality projection Scale AA must be used. |
-08/2016
Q1013. How should interest rates be determined for purposes of calculating the preliminary value of defined pension benefits?
A1013. Interest rates must be determined using the methods described in section 3540 of the
Canadian Institute of Actuaries’ Standards of Practice ![open new window [New Window]](/Style%20Library/FSCO/Internet/Images/icons/external.png)
(CIA SOP) for purposes of calculating the preliminary value of defined pension benefits, consistent with section 3 of Ontario Regulation 287/11 (Family Law Matters).
Specifically, the interest rates must be calculated based on the applicable Canadian Socio-Economic Information Management System (CANSIM) series, as set out in section 3540.05.
As outlined in section 3540.02 of the CIA SOP, if the Family Law Valuation Date is:
- on or before January 31, 2011, the reported rates for the applicable CANSIM series should be determined with a lag of two months;
- on or after February 1, 2011, the reported rates for the applicable CANSIM series should be determined with a lag of one month. -11/2016
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 ![open new window [New Window]](/Style%20Library/FSCO/Internet/Images/icons/external.png)
(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 ![open new window [New Window]](/Style%20Library/FSCO/Internet/Images/icons/external.png)
requires that section 3500 of the
Canadian Institute of Actuaries’ Standards of Practice ![open new window [New Window]](/Style%20Library/FSCO/Internet/Images/icons/external.png)
(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 ![open new window [New Window]](/Style%20Library/FSCO/Internet/Images/icons/external.png)
(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