Nov 17, 2023
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The Financial Services Regulatory Authority of Ontario (“FSRA”) has just released a consultation on potential rules to address issues in the division of pensions in marriage breakdown. These would be the first FSRA rules related to the pension sector since they were provided with the power to make rules in 2019.  

Ontario pension plan stakeholders have had a number of consultations from FSRA and the Ministry of Finance to consider in the last few months: Roles and Responsibilities of Administrators Guidance, Pension Plan Amendment Guidance, the Target Benefit Framework, and Information Technology (“IT”) Risk Management Guidance, plus consultation on FSRA’s fees and Statement of Priorities.

Despite the likely consultation fatigue, pension plan administrators should take a moment to consider the questions FSRA has set out, with their reasons, as any eventual FSRA rules on family law issues will affect pension plan administrators on a frequent basis.  The questions which could affect systems and costs are:

  • Should the maximum fees for the family law valuations be increased from current levels?
  • Should the rules incorporate interest on payments to spouses as they are now based on the Heringer case) or on a different basis?
  • Should the rules confirm flexibility/options for retired member spousal split arrears?

As FSRA’s direction will be set by this preliminary consultation, providing feedback, even if brief, could be very helpful to guiding FSRA to a productive result. FSRA hears from some members about concerns, but does not see how the current Family Law Regulations work. Given members are rarely in a position to provide consultation feedback on such matters, plan administrators are well-placed to share member experiences as well.

This blog provides some of the highlights of the consultation, not a full review. If you wish to discuss them in more detail in relation to a particular pension plan or circumstance, please contact one of Cavalluzzo’s experienced pension lawyers, listed below.

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