The Financial Services Regulatory Authority of Ontario (FSRA) has published proposed guidance related to the valuation and division of pensions upon marriage breakdown.

The guidance aims to support plan administrators’ compliance with their legal obligations as they administer pension settlements.

It also “consolidates and refreshes” previous policies under FSRA’s predecessor, the Financial Services Commission of Ontario, the guidance said.

It outlined the principles that FSRA will apply in its supervisory role, and provided interpretations of certain sections of Ontario’s Pension Benefits Act (PBA) — that act provides the steps required to value and pay part of a pension as an equalization payment when a marriage ends.

FSRA will enforce minimum standards set out in the act’s relevant provisions, focusing its regulatory efforts on areas of “greatest potential harm to plan members and their spouses,” the guidance said.

It added that FSRA’s interpretation of the act will be guided by a key principle from Ontario’s Family Law Act (FLA): orderly and equitable settlement of spouses’ property upon marriage breakdown.

Not all pensions are subject to the PBA. For example, federally regulated pension plans are subject to the federal Pension Benefits Standards Act, and its rules for pension division and distribution.

In the case of an Ontario client with a federally regulated pension, the FLA requires the pension’s valuation to be determined in accordance with the PBA, where “reasonably possible.”

FSRA published information online for pension members and their spouses to learn about a pension’s valuation and division upon marriage breakdown.

The consultation closes on May 3, 2021.