If the member’s benefits are not in a local plan, they are subject to the rules that apply to “extraprovincial plans.” [FLA, ss 123, 110, definition of “extraprovincial plan”]
At the time of publication, no Forms have been prescribed for use with extraprovincial plans.
Pension benefits in an extraprovincial plan are divided by legislated methods applied in the plan’s jurisdiction.
If there is no legislated method of pension division, the benefits are divided in the same way as a matured pension (see Chapter 5), by the administrator dividing the monthly pension payment between the member and former spouse. (Even if there is a legislated method, a B.C. court can order a plan-administered benefit split if the legislated method produces a result that is significantly less generous than a plan-administered benefit split.)
| 7.1 Extraprovincial plan defined | What is an extraprovincial plan? |
| An “extraprovincial plan” is a plan that is not a “local plan”. The definition of “local plan” in FLA, s 110 is broad, and includes private plans registered outside B.C., and federally regulated private occupational plans (as opposed to public sector plans), to the extent the member accrues pension entitlement while working in B.C. or the plan has any B.C. members. So it is important not to jump to the conclusion that benefits are in an extraprovincial plan (and therefore not subject to the rules that apply to local plans) just because the plan is registered outside of B.C. Many plans registered outside B.C. will qualify as local plans. [See para 1.13 and Chapter 1 generally] | |
| 7.2 Dividing benefits in an extraprovincial plan | How are benefits in an extraprovincial plan divided? |
| If the plan is subject to legislation that sets out a method of pension division, the legislated method applies. [FLA, s 123(2)(a)] If the governing legislation does not provide a method of pension division, the benefits are divided by waiting until the pension commences and the |
| administrator paying the former spouse a proportionate share of each monthly pension payment (sometimes referred to as a “plan administered benefit split”). [FLA, s 123(2)(b)] A court can also order that this method applies, if the legislated method would operate unfairly having regard to policies adopted under B.C. pension division legislation. [FLA, s 123(3)] There may be some difficulty enforcing such an arrangement against a plan located outside B.C. As a practical matter, having the member pay the former spouse the proportionate share of the monthly payments may be the only available method of dividing the pension. If problems in this respect arise, the spouse is protected by FLA, s 144, which designates the member to be a trustee of the spouse’s proportionate share (so, if the administrator pays any part of the spouse’s share to the member, the member would be under an obligation to pay it to the spouse). Where a court’s ability to make an order dividing property on the breakdown of a relationship is limited because the property is located outside the province, the court will often adjust the division by reapportioning entitlement to property located within the province. | |
| 7.3 CPP is an extraprovincial plan | Is the Canada Pension Plan an extraprovincial plan? |
| Yes. [See Coulter v Coulter, 1998 CanLII 5677, 60 BCLR (3d) 6 (BCCA)] In accordance with the FLA rules that apply to extraprovincial plans, CPP entitlement would be divided under the rules set out under the Canada Pension Plan, RSC 1985, c C-8. | |
| 7.4 Federal public service plans are extraprovincial plans | Are federal public sector pension plans (which are subject to division under the federal Pension Benefits Division Act) extraprovincial plans? |
| Yes. [See Baker v Baker, 1998 CanLII 2902, 34 RFL (4th) 364 (BCSC)] In accordance with the FLA rules that apply to extraprovincial plans, federal public sector plans would be divided under the rules set out under the federal Pension Benefits Division Act. |
Chapter 7
Dividing Benefits in an Extraprovincial Plan (FLA, s 123)
| 7.5 Benefits earned from employment in B.C. | The member earned benefits under the Canada Post Plan while employed in B.C. Is the Canada Post Plan an extraprovincial plan? |
| No. In these circumstances (because the benefits were earned from employment in B.C.) it would qualify as a local plan. The Canada Post Plan is not a public sector plan. It is governed by the federal Pension Benefits Standards Act. That Act provides that provincial law governs the division of pension benefits (although it also permits benefits to be divided by an assignment to the former spouse under s 25(4)). The definition of “local plan” in FLA, s 110 includes plans that, under their governing legislation, are subject to provincial law. See para 1.12. | |
| 7.6 Security for spouse’s interest? | Does a former spouse have security for the interest in benefits in an extraprovincial plan? |
| If the legislation governing the plan provides a pension division mechanism, security available to the former spouse depends upon the provisions of that legislation. If the administrator (or member) is responsible for dividing the income stream after pension commencement, the spouse may have limited, or no, security through the plan itself and alternative arrangements (such as life insurance) may need to be explored. See para 8.8. |