Update: FSCO position on Carrigan decision

August 26, 2013

The Financial Services Commission of Ontario (FSCO) has released its conclusion of the implications of the Carrigan v. Carrigan Estate decision in relation to the Pension Benefits Act (PBA).

In our July 2, 2013 communication we shared with you information about the Carrigan decision, and how it changes the way that pre-retirement death benefits are paid out to the spouse of a plan member. At that time, FSCO had not yet stated its position on whether the Carrigan case applies outside the context of section 48 of the PBA and a pre-retirement death benefit situation.

On July 3, 2013, FSCO released an update, which is available at this link. Key points from the update include the following:

In general terms, FSCO believes that in the absence of a government review and final court ruling, the Carrigan decision does not apply to any other provision in the PBA. This includes section 44 , which sets out the rights of a spouse to joint and survivor pension. In summary, FSCO states that:

  • The Carrigan decision does not take away the common-law spouse's right to a joint and survivor pension under section 44, even if the member is still legally married to another person (who is living separate and apart from the member) on the date the pension begins.
  • Plan administrators are not in contravention of the PBA if they continue to treat the member's common-law spouse as entitled to a joint and survivor pension under section 44, even if the member is still legally married to another person (who is living separate and apart from the member at retirement).

It is also FSCO's position that there is no requirement for plan administrators to revisit the payment of any pre-retirement death benefits prior to October 31, 2012 (the date that the Carrigan decision came into effect).

For more information, please consult the section for Pension Plan Administrators on FSCO's website.

Questions?
Please contact your Sun Life Financial Group Retirement Services representative.