The FLA applies to any pension division arrangements completed after it came into force (on March 18th, 2013).
There will be various issues about the interplay between the FRA and the FLA for agreements and orders made before the FLA came into force, and where initial steps have been taken under the FRA. The FLA provides transition rules addressing these questions. [FLA, ss 252-253] See Table 4 at the end of this Chapter.
How the FLA applies to agreements or orders made under the FRA
If the pension division arrangements spell out all aspects of the pension division, and they don’t conflict with the requirements of B.C. legislation, then the agreement or order would be sufficient for determining each party’s entitlement.
However, if events take place that are not addressed in the pension division arrangements, then B.C.’s pension division legislation fills in the gaps. The legislation is sometimes referred to as providing “default rules” because its provisions apply in the absence of express directions in the agreement or court order.
The FLA provides that it applies to pension division arrangements completed under the FRA (s. 253(2)). This means that:
- any additional options for pension division provided under the FLA apply to pension division orders or agreements made under the FRA (for example, under the FRA, a supplemental pension was divided by a benefit split while under the FLA the former spouse is entitled to receive the share by a separate pension when the member’s pension commences—See Chapter 6. The transition rules mean that a spouse entitled to a share of a supplemental pension under the FRA can choose to receive the share by a separate pension as provided for under the FLA); and
- if the order or agreement made under the FRA does not address an issue that has arisen, the FLA default rules would apply to resolve what is to happen.
For the most part, the FLA rules are the same as the FRA rules, but there are three important exceptions:
- the FLA rules differ from the FRA for determining the commuted value of benefits determined by a benefit formula provision, and the separate pension payable to a limited member. [See Chapter 2] (In this case, the FRA rules applied if an application was made by the limited member for the share under the FRA either before the FLA came into force or, if the administrator provided a written notice about the limited member’s options, within the period specified in the notice for making the election. If no period was specified, it was 60 days from the date of the notice); [Reg., s 29(2) and (3)]
- the FLA rules differ from the FRA for determining a limited member’s entitlement if the member dies before pension commencement;, [See Chapter 8] and
- the FLA rules differ from the FRA concerning the division of a matured pension after the death of the member, where the limited member is not the joint annuitant [see paras 5.5 and 5.6]
Proceedings to challenge or review pension division agreements
If proceedings have been commenced under the FRA that involve a claim to pension benefits, the FRA continues to apply to those proceedings, unless the parties otherwise agree to continue under the FLA. [FLA, s 252(2)(b)]
Any challenge to an agreement made under the FRA (to set it aside, or for reapportionment) would be brought under the FRA. [FLA, s252 (2)(a)] If the agreement is made after the FLA comes into force, then it would be subject to review under the FLA rules.
How the FLA applies to agreements or orders made before July 1st, 1995
B.C. first enacted pension division legislation on July 1st, 1995.
Any agreement (or order) made on or after that date addressing the division of pension benefits is automatically subject to B.C.’s pension division legislation, unless the pension division arrangements expressly exclude its operation. It is not necessary for the agreement or order to provide that Part 6 applies. [FRA, s 71(1), FLA, s 111(1)]
If an order or agreement was made before July 1st, 1995 and it was brought under the umbrella of the FRA (by agreement of the parties, or the provisions of the FRA) the FLA will apply to that order or agreement in the same way as if it had been made after July 1st, 1995 (as discussed above).
As pension division legislation has now been in effect for over 30 years, this edition no longer includes questions and answers regarding orders or agreements made before the legislation came into effect. See the fourth edition of this guide for questions and answers on this topic.
| 14.1 Agreement made under the FRA | We administer a plan that uses a benefit formula provision and have received from the former spouse an agreement dividing the member’s unmatured benefits. The former spouse filed a Form 1 under the FRA with us in 2012. The agreement refers to the benefits being divided under Part 6 of the FRA. How do we deal with this? | |
| Unless the pension division arrangements are completed and the spouse has received a share of the benefits before the FLA comes into effect, the FLA rules apply to the division of the benefits. See the introduction to this Chapter. Even if the former spouse became a limited member under the FRA, the FLA rules apply. [FLA, s 253(2)] Any application for a share of the benefits, or to become a limited member, made after the FLA comes into force, would be governed by the FLA. | ||
| 14.2 Application for separate pension | The former spouse became a limited member in 2010, under the FRA. The limited member has applied for a separate pension. The member is eligible for pension commencement but has not yet made that application. Under the FRA, the former spouse had to wait until the member’s pension commenced to receive a separate pension. Are we required to pay the limited member the separate pension? | ||
| Yes. Entitlement to benefits is determined under the FLA, even where the former spouse registered as a limited member under the FRA. [FLA, s 253(2)] This means that the former spouse can make the choice provided under the FLA, to receive the proportionate share as a separate pension at any date after the member becomes eligible for pension commencement. | |||
| 14.3 Limited member’s share if member has died | The former spouse became a limited member under our plan in 2010, under the FRA. The FLA is now in force, the limited member has not yet received the share of benefits, and the member has just died. The member’s pension had not commenced. How do we determine the limited member’s entitlement? The pension division arrangements are silent about what happens in this situation. | ||
| This is one of the reasons that the FLA rules apply to pension division arrangements formalized under the FRA. Under the FRA, the limited member was entitled to a share of the survivor benefits, but this sometimes led to unequal division that prejudiced either the limited member (where the survivor benefits were inadequate) or the member’s estate (where the survivor benefits equaled the share of the benefits before the member’s death). See Chapter 8, and para 8.5 in particular. The FLA provides that the limited member receives the share of the benefits determined the day before the member’s death: see para 8.3. This overrides the FRA rules that apply in the absence of specific direction on the point (or consultation on this issue by the administrator). [FLA, s 253(2)] | |||
| 14.4 Using an FRA Form 2 under the FLA | We received an FRA Form 1 from the former spouse in 2010. The FLA is in force, and we have just received a court order dividing the benefits, | ||
| together with a Form 2 under the FRA. Can we accept that to register the former spouse as a limited member? | |||
| The administrator has discretion about accepting the FRA Forms. [FLA, s 253(4)]. But the administrator can also require the parties to use the FLA Forms. This discretion was intended to bridge administrative questions that might arise during the transition period after the FLA coming into force. At the time this edition of the Q&A is being prepared (in 2025), it is difficult to conceive of a situation where the FLA Forms should not be required. | |||
| 14.5 Administrator discretion and applicable law | Does the administrator’s discretion about using the FRA or the FLA Forms mean that the administrator gets to decide which Act applies to dividing the benefits? | ||
| No. The administrator’s discretion extends only to determining which Forms to use. Technically, once the FLA is in force, all aspects of the FLA pension division procedures apply, including the use of the FLA Forms. But processing the Forms is a procedural requirement, not a substantive one, and there will be many cases where pension division arrangements are in process where nothing is gained by insisting that the parties refile using the FLA Forms. | |||
| 14.6 Using an FRA Form 2 under the FLA | This is a situation where all communications with the parties have taken place after the FLA came into force. For some reason, the former spouse has used a Form 2 instead of a Form P2 in the application to become a limited member. Can we accept it? | ||
| Yes. Technically, all aspects of the FLA apply in this case, including the use of the FLA Forms. But processing the Forms is a procedural requirement, not a substantive one and the FLA gives the administrator a discretion to accept the FRA Forms or require the parties to use the FLA Forms. [FLA, s 253(4)] This discretion is intended to simplify the administrative issues that may arise in the transition to the FLA, so that applications that have been in the works are not rejected on non-substantive grounds. | |||
| 14.7 FRA or FLA? | The former spouse became a limited member of our plan in 2010, under the FRA. The member is now eligible for pension commencement. The FLA is now in force, and the former spouse has applied to receive the share by a lump sum transfer. Under the FRA rules, the former spouse’s share was determined assuming the member’s pension commenced at the date | ||
| elected for the transfer. Under the FLA, however, the former spouse’s share is determined assuming pension commencement at the later of the member’s actual age and the average age of retirement for the plan. Which Act governs in this case? | |||
| The FLA. [FLA, s 253(2)] If a spouse became a limited member under the FRA, but benefits have not been divided as of the date Part 6 of the FLA comes into force, Part 6 of the FLA applies to the division of the benefits. (See para 2.59 with respect to using the average age of retirement and para 2.70 concerning alternatives to using the average age of retirement.) | |||
| 14.8 Dates not specified | We have received a separation agreement that was drafted under the FRA. There are no entitlement dates indicated but we have the date of marriage on file and can apply the default provisions under the former FRA to ascertain the end date of the entitlement period. Should we apply the FRA default provisions for the start and end dates, or request the parties to clarify the dates under the FLA? | ||
| The FRA rules would apply. Although the FLA does apply to fill in gaps in an order or agreement, this is one case where the FLA does not have a rule so entitlement would be determined by the law that applied at the date the agreement or order was finalized. If the agreement or court order was made when Part 6 of the FRA was in force, and no dates are specified for determining the portion of the benefits that are subject to division, the period subject to division is from the | |||
| date of marriage to the triggering event. See para 2.28. If the agreement or court order is made under the FLA, and no dates are specified, the parties must provide joint directions concerning the dates to be used. | |||
| 14.9 FRA or FLA? | We represent a plan member. The former spouse is claiming a share of the pension benefits. Proceedings were commenced under the FRA. There has been no triggering event. What date will determine the end of the period subject to division: a triggering event under the FRA, or the date of separation under the FLA? | ||
| The triggering event under the FRA (at least as a starting point). Proceedings started under the FRA continue under the FRA (FLA, s 252(2), although the parties can agree to have the FLA apply). But courts under the FRA have not blindly applied the triggering event as the end date. There are numerous cases where the date of separation was used. In other cases, a midpoint between the date of separation and the triggering event was selected. The principle under the FRA for determining the appropriate end date for dividing the benefits has sometimes been characterized as selecting the date when any prejudice caused by the marriage or its breakdown has been compensated—sometimes this is when support started being paid, or when the other spouse returned to employment and began independently accruing pension entitlement: Green v Green, 2000 BCCA 310. | |||
| 14.10 FRA Forms filed but judge not told | We’ve received a court order providing that the benefits are divided under Part 6 of the FLA. The reasons for judgment were also provided to our plan, and the judge says that he concluded that the FLA applies because there was no evidence that FRA Forms were filed. In fact, we have FRA Forms that were filed with us in 2012, which would mean that the FRA should continue to apply to the pension division issues. How do we deal with this? | ||
This does not present a problem for plan administrators. You would implement the order in the same way as you would deal with any other order dividing the benefits.
Determining which Act applies is important to determine which rules govern how the benefits are divided and the main question in that respect is: what period is used to determine the former spouse’s share. In the absence of agreement or court order, the FRA would divide the benefits that accrued from the date of marriage to the triggering event (see paras 2.20 and 2.27), while the FLA provides for dividing the benefits from the date the parties’ relationship began to the date of separation (see para 2.18).
The FLA provides that the FRA still applies for determining this (and other questions) if Forms under the FRA were filed before the FLA came into force. But both Acts give the court discretion to depart from the default rules, so essentially what has happened here is that the court has held that, based on the evidence before it, the benefits are to be divided under the FLA.
Courts have adopted an approach under which, if there is no evidence that Forms were filed under the FRA, they will apply the FLA rules: Stonehouse v Stonehouse, 2014 BCSC 1057 at para 25. It is hard to identify any other reasonable approach for a court to adopt on this question.
In the circumstances, the plan administrator has more information than the court concerning the background facts. But there are many situations, such as here, where that is the case but the additional information does not invalidate the order.
It is true that there are circumstances where courts will reconsider a decision on the basis of new evidence, and it is open to either party to apply to court for such a reconsideration. But, until such a reconsideration takes place, the order is valid, and the plan administrator is not only entitled, but required, to rely upon it.
Table 4 – Transition Rules – FRA – FLA & Pension Division
| Issue | Which Act applies? |
| 1. Former spouse becomes limited member under FRA. | FLA: Agreement or court order governs the division of the benefits. Additional rights available under the FLA are available to the limited member. If agreement or court order does not provide sufficient directions on particular issues, FLA rules apply. |
| 2. Agreement or order made while FRA in force, but former spouse becomes limited member under FLA. | FLA: Same as in 2. |
| 3. Agreement made before FLA comes into force dealing with pension benefits, and a party wants to enforce or vary it after the FLA | FRA: Questions about whether the agreement is enforceable at all, or whether the agreement should be varied because it is substantially unfair, are subject to the FRA (FLA, s 252(2)(a)). This is the general rule that applies in all cases, not just pension division situations. The parties can agree, however, to have these issues decided under the FLA. (This is different from questions |
| comes into force. | about how the pension division arrangements are to operate: see 5.) |
| 4. Agreement made before FLA comes into force dealing with pension benefits, but there are questions about how to deal with a particular circumstance. | FLA: Questions about how pension division arrangements are to operate are determined under the FLA. (FLA, s 253(2)) If the pension division arrangements do not specify what is to happen in a particular situation, the FLA default rules would be consulted. Or the court can review pension division arrangements under FLA, ss. 130 (clarifying division of benefits) or 131 (changing division of benefits in unusual circumstances). |
| 5. Agreement made before FLA comes into force dealing with pension benefits, but silent about dates to be used. | FRA: questions about determining the former spouse’s proportionate share would be determined under Parts 5 and 6 of the FRA (from date of marriage to date triggering event). |
| 6. Proceedings under FRA respecting pension division not concluded when FLA in force. | FRA: FRA continues to apply to the proceedings (FLA, s 252(2)(b)), unless the parties otherwise agree. |
[CG1]Plan administrators to review and comment
[SN2]Adrian Rockwell (BC Pensions) – Pension Corporation has reviewed, no comments