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
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.
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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