Where FSCO provides a form of waiver, use that form, says Ontario Court of Appeal

April 28, 2011

The Ontario Court of Appeal has ruled that a pension plan administrator who uses its own form of joint and survivor spousal benefit waiver does so at its peril, if subsequently challenged by the spouse.

Mr. Smith was offered fourteen pension options to choose from on his retirement from Casco. The default option under the Casco plan provided for a joint and survivor pension; however, Mr. Smith chose a life-only pension with a 5 year guarantee.  The life-only option was only available to Mr. Smith where his spouse, Mrs. Smith, waived her right to the survivor pension pursuant to section 46 of the Pension Benefits Act (the PBA).  Mrs. Smith signed a form of waiver prepared by Casco (the Casco Waiver) waiving her right to receive a survivor pension. According to Mrs. Smith, she signed the Casco Waiver without reading it carefully. Mr. Smith died shortly after his retirement and approximately 18 months before the expiry of the 5 year guarantee period.

The main issue on appeal was whether the Casco Waiver departed in substance from the form of waiver provided by FSCO (the FSCO Waiver) thus violating s. 46 of the PBA. The Court examined the two waivers and concluded that the differences in the Casco Waiver and FSCO Waiver were fatal, thus rendering the Casco Waiver invalid and a violation of the PBA. It is interesting to note that the Court seized upon relatively minor differences in the Casco Waiver and FSCO Waiver in coming to its conclusion, including a lack of clarity as to what was being waived, the use of a different title, the lack of bolding, the lesser prominence given to certain provisions and the absence of a note providing instructions with respect to the delivery of the form. In the result, the Court granted Mrs. Smith the survivor pension that she would have been entitled to, had her husband selected the default pension option on retirement.

Our views:
Although the Court declined to decide whether a waiver can be effective using a form other than the FSCO Waiver, the message sent by the Court is clear: where FSCO provides a form, plan administrators should use the form. 
For a list of forms provided by FSCO, please click here.

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