Chapter 5. Dividing a Pension that has Commenced (FLA, s 117)

When a member chooses to have the pension commence and begins receiving monthly payments, the pension is said to “mature”.

If the pension division arrangements are not finalized until after the pension has commenced, the benefits are divided by the former spouse becoming a limited member of the plan (by filing a Form P2 together with a copy of the agreement or order dividing the benefits). [FLA, ss 117, 118; Reg., s 4(1)(b)] This approach is also used if an annuity has been purchased by the administrator on behalf of the member, whether or not the member is receiving payments under the annuity, or if an annuity has been purchased by a spouse and the spouse is receiving payments under the annuity. [FLA, s 118.1]

The limited member is entitled to a proportionate share of each benefit paid out under the plan until the earliest of the death of the member, the death of the limited member, and the termination of benefits under the plan. (The calculation of a proportionate share of a matured pension is discussed at para 2.20.)

This method of pension division is completely different from the methods used for dividing benefits in local plans where the pension has not yet commenced (which were discussed in Chapters 2, 3 and 4). Before pension commencement, the former spouse is entitled to receive a separate share of the member’s benefits (although the division is deferred for benefits determined by a benefit formula provision).

For matured pensions, in contrast, the pension is left intact, and it is the income stream that is divided. (The federal PBSA, s 25(7), however, permits a plan to amend its text to permit dividing a matured pension into two single life pensions—see para 2.75—and some other provinces also permit this).

If the member is close to retirement when the party’s relationship ends, the former spouse should act quickly to preserve the methods that apply to divide benefits before pension commencement or take steps to preserve rights: see paras 5.4 and 15.40.[SN1] 

Where the benefits are in a defined contribution account, and the member has begun receiving benefits by withdrawals (such as under a variable benefits option), an exception is made. Section 114 continues to apply to the funds in the defined contribution account, not s 117, and the former spouse can still receive a share of the defined contribution account by a transfer from the plan (as discussed in Chapter 3).

5.1 What is a matured pension?	What is a matured pension?
	Benefits under a plan mature when a member begins to receive the pension. [See para 2.59]   Technically, if a member is making Life Income Type Benefit (“LITB”) withdrawals from a defined contribution account (sometimes referred to as receiving a “variable pension” or “variable benefits”) this would qualify as a matured pension. But the rules that apply to matured pensions do not apply if the benefits remain in a defined contribution account, because they can still be directly divided with the former spouse without prejudicing third parties. [FLA, s 114(1)] See para 3.16.
5.2 Subject to FLA?	Is the plan subject to the FLA?
	[See para 1.9 and Chapter 1 generally]
5.3 Pre-March 18, 2013 arrangements	Does the FLA apply to an agreement or court order made before the FLA comes into force?
	[See Chapter 14]
5.4 Parties separate before pension commencement but finalize pension division arrangements after	The parties separated before the member’s pension commenced, but the pension division arrangements were not finalized until after. Why don’t the rules that apply before pension commencement continue to apply? (In this case, the former spouse wants a separate lifetime pension, not a share of the monthly benefits which will end when the member dies. That certainly seems like a fairer result for both parties.)
	The policy under Part 6 balances the interests of the member, spouse and plan. It is difficult to undo the pension arrangements that have already been put in place: see para 5.7. For that reason, the member and spouse must deal with the circumstances that exist when they finally get around to finalizing their property arrangements: see also para 5.15. It is certainly true that the rules that apply before pension commencement usually provide the former spouse with better financial security. But if the former spouse wants them to apply, the former spouse must act before pension commencement, or make arrangements to

	preserve those rights (such as seeking the agreement of the member to postpone pension commencement or, if that agreement cannot be reached, by obtaining a court order to that effect). The FLA permits arrangements for implementing the pension division retroactively. [FLA, s 132; see para 15.40] But, again, it is necessary that the former spouse not delay in protecting rights to the benefits.
5.5 When does a pension “terminate”?	Section 117(2) says the spouse gets a share of benefits during the member’s lifetime until the earlier of the termination of benefits under the plan or the death of the spouse. When do benefits “terminate”?
	A pension that is single life, without a guarantee period, is payable only for the life of the member. Such a pension would terminate when the member dies. The spouse would receive no further share after the member’s death.   If there is a survivor benefit payable (to anyone) when the member dies, the benefits do not terminate until the survivor benefit terminates. However, s 117(2) restricts the former spouse’s entitlement to benefits paid “during the member’s lifetime”.   Consequently, if the agreement or order does not provide to the contrary, on the death of the member, the division of the benefits ends. If the spouse is the beneficiary of the survivor benefit, then the spouse would receive the survivor benefit as a result of the beneficiary designation. [FLA, s 117(4)] If the spouse is not the beneficiary of the survivor benefit, on the death of the member the spouse would cease receiving a proportionate share of the amount payable to the beneficiary. [See Chapter 8]   Under the FRA, the former spouse was automatically entitled to continue to receive a share of any survivor benefits paid under the plan. The FLA drafting represents a change of policy. It is, however, open to the parties, or the court, to provide for continued payments to the limited member: see para 5.6. In this situation, when acting on behalf of a former spouse, best practice would be to contact the plan administrator to request confirmation in writing about whether the proportionate share will continue to be paid if the member dies first.
5.6 The member has died and the LM is not the joint annuitant	We have been paying a limited member a share of the member’s matured pension. The member has now died and there is a 60% survivor benefit payable to the member’s current spouse. The agreement provides that the limited member is entitled to continue receiving the pro rata share, but s

	117(2) restricts payments to the limited member to those made during the member’s lifetime. What happens now?
	This is an unusual situation. See para 5.10 for circumstances in which this type of arrangement might arise.   The FLA rules fill in gaps, where the pension division arrangements have not addressed particular issues. It is open to the parties, or the court, however, to provide directions in many of these cases. [FLA, s 111(1)]   If the pension division arrangements were finalized after the pension matured, then continued division with the limited member would require: if an agreement is used, that the joint annuitant be a party to the agreement, or   if in a court order, that the joint annuitant be a party to the proceedings.   Otherwise, the agreement or court order could not affect the rights of the joint annuitant.
5.7 The spouse is the joint annuitant	How does the benefit split of a matured pension work where the spouse is a joint annuitant?
	For example: the member’s pension pays $1000 per month. The limited member is entitled to 1/5 of benefits paid under the pension. The limited member is the joint annuitant. The survivor benefit reduces the monthly payment to 60% on the death of the member. While both member and limited member are alive, the member receives $800/mo. The limited member receives $200/mo.   If the member dies first, the limited member becomes entitled to the whole of the survivor benefit: $600/mo. [FLA, s 124(5)] Why does the legislation adopt a policy that increases the limited member’s entitlement after the member dies? For these reasons: 1) any other approach would require opening up the pension and setting aside elections already made. Some, but not all, administrators would be

	capable of doing this. It would be difficult, for example, to open up the matured pension where an annuity has been purchased from a third party. in the example the limited member receives more money when the member dies, but that will not always be the case. More commonly, where the limited member’s only source of income is the pension, the member may have been paying support, which ends when the member dies.the arrangement, more often than not, will be a fair one. The member and spouse, in happier times, addressed their minds to the income needs of the survivor. They agreed to accept a slightly smaller pension during their joint lives to ensure that the survivor had an acceptable level of income after. The breakdown of a relationship probably affects not at all the level of income needed by the survivor.the member is advantaged if the member survives the limited member. The member’s share of the pension in the example remains at $1000/mo. all of which, after the limited member’s death, is paid to the member.
5.8 Can the survivorship election be changed?	The member married shortly before pension commencement. As the PBSA required, the member took the pension with a 60% survivor benefit. The spouse and member have now split up. Can the member change the survivorship election?
	No, not under B.C. law. In most cases, the amount of the benefits payable during the parties’ joint lifetimes, and the benefits payable after the death of a party, have been determined on an actuarial equivalent basis.[SN2]  The amounts are specific to the parties and their life expectancies. The idea is that, whatever form of pension chosen by the member at pension commencement, the overall payments required under the plan will have the same value.   But this would not be the case if the member could change the beneficiary of the survivor benefits at some later date. If the survivor benefits were based on the member’s spouse being 50 at the date of pension commencement, changing the beneficiary of the survivor benefit to someone who is 5 years younger (and therefore likely to live 5 years longer than the original spouse) would substantially alter the plan’s financial obligations.

	So it is not a simple thing to change who is entitled to survivor benefits on the death of a member. It would involve commuting the pension, and recalculating everything again to determine the amounts payable, based on the life expectancies of the member and the new beneficiary. B.C. law does not require an administrator to commute a joint and survivor pension (but see para 5.25 for situations where this would still be permitted under B.C. law). It is uncommon, but legislation in a few other jurisdictions does provide for commuting a joint and survivor pension, or at least permitting an administrator to amend the plan text to provide for that.   In some cases, an administrator will permit a limited window after pension commencement (60 days, for example) for the member to select another option.   See para 5.21 concerning what constitutes an effective waiver of survivor benefits.
5.9 Spouse1 v Spouse2	How does the benefit split of a matured pension work where spouse2 is entitled to a proportionate share of the pension, but spouse1 is the joint annuitant?
	For example: the member is married to spouse1 at the date of pension commencement and takes a pension that pays a 60% survivor benefit. The member’s pension pays $1200 per month. The survivor benefit reduces the monthly payment to 60% on the death of the member. The relationship fails and spouse1 becomes entitled to 1/4 of the benefits paid under the pension. The member remarries. When the second relationship fails, spouse2 gets a court order giving the spouse a 1/2 interest in the member’s remaining pension (or 3/8 of the entire pension).   This is a highly unusual scenario, because the rules under Part 6 only provide for the division of accruals during the relationship, and none of the pension would have been earned during spouse2’s relationship with the member. (It is, however, open to a court to divide the member’s remaining pension in this situation, under FLA, s 95, if the Part 6 rules operate in a way that is significantly unfair having regard to specified factors. Moreover, FLA, s 129 expressly permits the reapportionment of pension entitlement having regard to support needs.)

	Before the failure of the member’s second relationship, the divided pension would give the member $900/mo. and spouse1 $300/mo. When the second relationship fails, the member gets $450/mo. and spouse2 $450/mo., while spouse1 continues to receive $300/mo.   If spouse1 dies first, the right to the full pension reverts to the member, but because it is subject to the interest in favour of spouse2, their respective portions would be recalculated under the terms of their pension division arrangements. If spouse2 is entitled to half of the benefits, then each would now receive $600/mo. If the member dies first, spouse1 receives the entire survivor benefit, $720/mo. Because spouse2’s interest arose after spouse1 became the joint annuitant, spouse2 would receive no share of the survivor benefit payable on the member’s death. Spouse2’s share ends when the member dies. (This scenario is different from the case where the former spouse is seeking a share of survivor benefits with respect to benefits that accrued during the parties’ relationship, discussed in para 5.10.)
5.10 Spouse2 v Spouse1	How does the benefit split of a matured pension work where spouse1 is entitled to a proportionate share of the pension, but spouse2 is the joint annuitant?
	For example: member and spouse1 separate, but do not divide family property. In the meantime, the member forms a marriage-like relationship with spouse2. The member retires and takes a joint and 60% survivor pension with spouse2.   Because spouse1 delayed in advancing rights, the situation has become somewhat complicated. Under the legislation, spouse1 is entitled to become a limited member of the plan and receive a proportionate share of the pension paid during the member’s lifetime. [FLA, s 117(2)] It is possible to continue the pension division arrangements after the death of the member, if the agreement or court order provides for that, and if spouse2 is a party to the agreement, or proceedings, as the case may be. See para 5.6.   A problem like this is less likely to occur under Part 6. If well advised, spouse1 will send the plan Form P1 when the relationship ends. Then, when the member makes elections on retirement, the administrator must give spouse1 30 days’ notice before acting on them. [Reg., s 9] That will give spouse1 time to advance the claim to the pension benefits and take the necessary steps to divide the

	benefits under the rules that apply before pension commencement (discussed in Chapters 2-4). With respect to preserving the rules that apply before pension commencement where more time is needed to finalize a claim, see para 15.40.   See paras 15.28 and 15.29 for information about calculating the notice period and determining when notice is deemed to be received.
5.11 After the limited member dies	If the income stream under a matured pension is being divided between the parties, and the limited member dies before the member, does the plan keep the portion that was being paid to the limited member on a prospective basis?
	No. In no situation involving the division of a matured pension will the plan keep the portion was being paid to the limited member. Under the legislation, the amount that the plan was paying to the limited member will commence to be paid to the member. [FLA, s 117(2)]   For both joint life pensions and single life pensions: on the death of the limited member, the pension division comes to an end and the limited member’s share commences to be paid by the plan to the member. The plan does not experience a financial ‘win’ by keeping the limited member’s share in these circumstances.
5.12 Dividing the unexpired guarantee period	On a benefit split of a matured pension, is a limited member entitled to a share of the unexpired guarantee period when the member dies?
	Only if the limited member is also beneficiary of the guarantee period. The division of matured benefits ends on the death of the member. If a third party is the beneficiary of the guarantee period, the third party would be entitled to all of the guarantee period, subject to the terms of the agreement or court order dividing the benefits. [FLA, s 117(2); see para 5.6]
5.13 Beneficiary of the unexpired guarantee period	When the member retired, spouse1 waived the joint and survivor pension. The member chose a 10-year guarantee and designated spouse1 to be the beneficiary. The relationship ended two years later and spouse1 became a limited member of the plan.

	The member cannot lawfully change the beneficiary designation of the guarantee period unless spouse1 signed PBSA, Form 2, Waiver B. Under PBSA,
	s. 80(5) and (6), a spouse who waives the minimum 60% survivor benefits (using PBSA, Form 2, Waiver A) is still entitled to whatever benefits are payable on the death of the member unless Waiver B is signed. If the member can lawfully change the beneficiary designation, and the agreement or court order does not otherwise provide for continued division, then the division of the benefits ends on the death of the member. [FLA, s 117(2)] See paras 3.18, 5.5 and 5.6.   If spouse1 did not sign Waiver B at pension commencement, it is still possible to sign it before the member dies to allow a change of beneficiary: see para 5.22.   Even if spouse1 did not sign Form 2, Waiver B, however, the beneficiary designation is effective if spouse1 predeceased the member. [FLA, s 80(7)]
5.14 The member files a false statement	The member signed a false statement on retirement saying the member had no spouse. The member took a single life pension. In fact, the member had a spouse, and the spouse has now delivered to the plan a Form P2 and an order giving the spouse a share of the pension. What can the plan do in this situation?
	If the plan had no notice of the order, nor of the existence of the spouse at the date of the member’s retirement, there is no obligation on the administrator to open up the pension. The spouse’s entitlement would be limited to a share of the single life pension. The spouse, however, has rights against the member. Some plans allow a 60-day (or longer) period following the start-up of a pension in which elections can be changed. If the spouse moves promptly enough, this would enable the spouse to require (a) the plan to convert the pension into the form of a joint and survivor pension (if the former spouse satisfied the definition of “spouse” at the relevant time) or (b) to treat the division as being of an unmatured plan, with the rights available under s 115.

	This kind of problem is usually avoided by record-keeping practices. Plans typically keep records about whether members have spouses. When a member retires, a plan that has a record of the existence of a spouse should require a good deal of convincing if the member purports to be unmarried. It may be necessary for the administrator to have the retiring member sign a declaration confirming that the member has no current spouse, and no former spouse who is entitled to any share of the benefits under family law. Or, if there is a record of a spouse on file, sending the spouse 30 days’ notice to provide a copy of an agreement or court order dividing the benefits. See also para 8.27.
5.15 Plan-administered benefit split v other pension division methods	Why does the FLA specify that a matured pension is divided by the administrator splitting the income stream between the parties?
	The legislation adopts the policy that once the member’s pension has commenced, undoing the arrangements made when the member retired would prejudice the plan too much. For example, in many cases, an annuity will have been purchased from a third party. Moreover, in most cases appropriate elections will have been made protecting both spouse and member. [See para 5.7]
5.16 Why not use a Rutherford spilt?	Is a plan-administered division of the income stream between the parties preferable to a Rutherford Order?
	The legislation requires the administrator to be responsible for dividing the monthly payments between the member and former spouse. In contrast, a Rutherford Order requires the member to administer the benefit split. A plan- administered benefit split is better because the spouse doesn’t have to rely upon the member. In too many cases under the law that applied before B.C. adopted pension division legislation, a former spouse was required to bring further proceedings to enforce the division because the member declined to pay. In contrast, under Part 6, the spouse looks directly to the administrator for all entitlement to the pension. See para 2.8.

5.17 The plan’s obligations when the parties separate before pension commencement but P1 received after	The member and spouse separated before the member’s pension commenced. The member has now retired with a pension that pays the minimum 60% survivor benefit required by the PBSA. The spouse has finally sent in Form P1. What obligations does the plan have?
	The administrator must send the member a Form P6 advising that the Form P1 has been received. The plan should advise the spouse that the pension has matured (that is, it is being paid). Until the plan receives a Form P2 with a court order or agreement recognizing the spouse’s share in the pension, the administrator must continue to pay the member the entire pension.   When the plan receives the Form P2 and court order or agreement, it will be responsible for dividing the pension by a benefit split. [FLA, s 117] The spouse will become a limited member and entitled to a proportionate share of each monthly pension payment. Rights on the death of the limited member or the member will be in accordance with the terms of the joint and survivor pension. The fact that the parties separated before pension commencement does not change the rules that apply if the pension division arrangements are not finalized until after pension commencement. There is no obligation on the administrator to undo the joint and survivor pension election. [See paras 5.7, 5.8, 5.10 and 5.21]   If the spouse had acted quickly enough before pension commencement, however, it might have been possible to preserve the pension division rules that apply before pension commencement: see para 15.40.
5.18 Annuity and tax withholdings	We are an insurance company, and one spouse purchased an annuity from us. The funds did not come from a pension plan or RRSP. The other spouse is claiming an interest in the annuity. What rules apply in that case?
	The FLA provides that the rules that apply to matured pensions (under FLA, s 117) also apply to any annuity under which the annuitant is receiving payments, even one that is purchased using funds that are not derived from a pension plan. [FLA, s 118.1(2) and (3)]. The policy reflects that such annuities are so similar to pensions, that they should be treated in the same way.

	The administrator is required to make separate tax withholdings for the parties. In any case where there is a conflict between the FLA requirement and the Income Tax Act, however, the ITA would apply to determine the administrator’s withholding obligations. If withholdings must be made from the member’s share that are attributable to payments made to the former spouse, the former spouse would be required to compensate the member. [FLA, s 141(1) and (2)]
5.19 Implementing division of pension in pay	We have received a Form P2 and other documents for the former spouse to become a limited member. The member’s pension is in pay. Everything appears to be in order. What timeframe do we have to implement the pension division arrangements?
	The former spouse is entitled to receive from the plan administrator a proportionate share of the payment made on or after the 30th day that the administrator has received all required documents. [FLA, s 137(2), Reg., s 15] See Table 5 in Chapter 15.
5.20 Implementing division of pension in pay	We have received a Form P2 and other documents for the former spouse to become a limited member. Reg., s 16(a) says that we have 60 days to register the former spouse as a limited member. Reg., s 15 says that the former spouse is entitled to a share of payments made 30 days after we receive the required documents. Which applies?
	There is no conflict. They both apply. You have 60 days to register the former spouse as a limited member. But if a pension payment is made 30 days after all the required documents are received, even if you have not finalized the registration of the former spouse as a limited member, the former spouse is entitled to a share of that payment. You would pay it to the former spouse once you have finalized the limited member registration.
5.21 Waiving the 60% survivor benefit	The member has provided us with an agreement under which the former spouse has waived any claim to the member’s pension. The member chose a pension that pays a 60% survivor benefit to the former spouse. The member is insisting that we change the beneficiary of the survivor benefit to the member’s new spouse. What are our obligations?
	B.C. law does not provide for the administrator commuting the pension and changing the beneficiary of the survivor benefits: see para 5.8. Even if it were possible (under the plan text or governing legislation), the consent of the former spouse would be required. An agreement or court order where the spouse waives a share of pension benefits would not constitute a waiver of the survivor benefits. These are separate aspects of the pension. The survivor benefits are regarded as the property of the former spouse [FLA, s 124(5); Tarr Estate v Tarr, 2014 BCCA 315], so a waiver of the benefits paid during the member’s lifetime would not extend to the survivor benefits payable to the spouse after the death of the member.

Under the FRA, if the agreement or court order clearly pertains to the survivor benefits, a waiver of those benefits is effective. However, even in that case, the waiver doesn’t mean that the member can then change the beneficiary of the survivor benefits. It means that the former spouse would be under an obligation to pay the benefits, when and as received, to the person designated by the member: Wice v Wice, 2009 BCSC 655.

As can be expected, cases concerning this issue involve a detailed consideration of what was intended under the agreement or court order. The survivor benefits usually constitute an extremely valuable asset. So it is important that a former spouse not accidentally waive entitlement to this benefit.

Under the FLA, a spouse may enter into an agreement or the court may order that survivor benefits be paid to a third party. In this case, a prescribed form must be used to notify the administrator of the arrangement. [FLA, s 126.1; Form P10 “Notice of Assignment of Survivor Benefits by Agreement or Order”]

There are very rare cases where it may make sense for the spouse with survivor benefits to agree to pay them to a third party. The duration of the survivor benefits would still be linked to the former spouse’s lifetime. There is no obligation on the plan administrator to assist and pay the benefits directly to the other beneficiary, and there is a general consensus that it would not be a good idea for the administrator to agree to do it (because of the problems of verifying whether the former spouse entitled to the survivor benefits remains alive and entitled to receive them, for one thing, but there are a number of other pitfalls best to avoid entirely, such as tax issues). This may seem a complicated method for assigning survivor benefits, but the policy underlying this part of the FLA is not to promote assignment, but to ensure that the plan is not responsible for administering such an arrangement.

5.22 Waiving the guarantee period	The spouse at the plan member’s retirement waived the right to the minimum 60% lifetime survivor’s benefit (signing PBSA, Form 2, Waiver A). The member chose a single life pension guaranteed for 15 years. The parties have now separated and formed new relationships. The member wants to change the beneficiary of the guarantee period to his new spouse. Can he do that? The former spouse is agreeable (she has her own pension benefits).
	Yes, the former spouse can waive entitlement to the guarantee period, using Waiver B of PBSA, Form 2. See also para 8.19.
5.23 Are survivor benefits affected by changed spousal status?	The member chose a 50% survivor benefit on pension commencement. The parties have requested us to confirm that the survivor benefit will not be affected by their separation or divorce. What rules apply in that case?
	Both the federal PBSA (s. 22(2)) and the B.C. PBSA (s. 80) require that the pension in favour of a member who is retiring pay a survivor benefit where the member has a spouse at the date the pension commenced: Smiley v Ontario Pension Board, 1994 CanLII 18189, 4 RFL (4th) 275 (Ont Gen Div).   This is a common provision in pension standards legislation. The member can choose another form of pension at pension commencement, but since it is the spouse that is entitled to the survivor benefits, electing another form of pension is only possible if the spouse signs a waiver prescribed under the pension standards legislation.

	The general rule in B.C. is that even where a waiver is signed: if the member chose a pension that provided some form of survivor benefits for the spouse; and   the spouse qualified as the member’s spouse at the date the member began to receive the pension; thena subsequent change of spousal status does not deprive the former spouse of the right to receive the survivor benefit whatever the plan text provides. [PBSA, s 81(2)]   The position may be different for plans that are not subject to B.C. law. [See para 8.9]
5.24 Dividing bridge benefits using a different formula	In addition to a lifetime pension, the member is receiving bridge benefits that will end when the member reaches 65. The parties want the member, who is younger, to keep all of the bridge benefits (this will allow the parties to have equal retirement income, since the former spouse will be receiving Old Age Security benefits before the member). Can the pension division arrangements specify different proportionate shares for the lifetime pension and the bridge benefits.
	Yes. The FLA refers to “a proportionate share”, but this is not restrictive. In an enactment, words in the singular include words in the plural. [Interpretation Act, RSBC 1996, c 238, s 28(3)] The parties can specify different proportionate shares that apply to discrete parts of the benefit, subject to the plan administrator’s ability to implement this approach (depending on plan design, it is conceivable that this approach would impose too great an administrative burden on the plan to implement). This will probably only be difficult where divisions are automated and the plan systems do not have the capacity to apply different percentages to different components of the pension. Check with the plan administrator.

5.25 Commuting the matured pension into a different form	The FLA does not provide for commuting a matured pension into two separate pensions for the parties, but our plan would like to offer that option. Can we do it?
	If the plan is dealing with a pension that has commenced, this would fall under FLA, s 117, which provides only for dividing the income stream.   The former spouse cannot compel the plan to provide options in addition to those under s 117. However, the plan can commute a matured pension into a different form in these cases: where legislation expressly permits this (which is not the case in B.C. for its general pension division legislation, but the B.C. legislature can adopt different rules in specific situations, such as where there are insolvency and restructuring proceedings. If the plan is regulated under other legislation, such as the federal PBSA, which permits commuting in this situation, then nothing in the FLA restricts that option);where the plan administrator implemented the pension in accordance with the member’s directions but (1) the member misled the plan (for example, stating that there was no one who qualified as a spouse at the date of pension commencement when there was), or (2) the plan failed to give the spouse or limited member required advance notice about the pension commencement (or otherwise failed to carry out due diligence); or   where the plan text permits this option.
5.26 Proportionate share of a matured pension	How is the proportionate share of a matured pension calculated?
	See paras 2.17 to 2.22 (particularly para 2.20).
5.27 Target benefit provision: temporary improvement in benefits	We administer a target benefit plan. The limited member chose to receive the share of the benefits by a separate pension. We have amended our plan to provide for a temporary improvement in benefits for retired members under PBSA, s 21. How does this affect the entitlement of the limited member under the separate pension? What about the entitlement of former limited members who received their share by a lump sum transfer from the plan?

The limited member receiving the separate pension enjoys the same rights as other retired members to the temporary improvement in benefits. Similarly, any decrease in benefits to retired members would apply equally to the limited member’s separate pension. In contrast, the limited member who took the lump sum transfer is no longer entitled to any further share of the pension benefits after the transfer is completed (nor subject to any clawback if benefits are later reduced).

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 [SN1]Updated by Stephanie Griffith (Benefits Administrator)

 [SN2]Updated by Stephen Cheng (Westcoast Actuaries)