A new special notice published by Eckler Ltd. is drawing attention to the publication of recent amendments to the Family Law Act in British Columbia which impact how pension assets are divided when relationships break down.
“This special notice highlights the relevant changes and implications for pension plan administrators,” they write. The amendments may also be of some interest to insurers as well, as the amendments also speak to the division of annuities.
The changes specify which parts of the Act apply to the division of annuities unless an agreement or order provides otherwise – both before and after the commencement of annuity payments. It also speaks to the process of dividing benefits under locked-in retirement accounts and life income funds.
Commuted value calculation
Changes already effective by virtue of the relevant Bill 17 – 2023: Family Law Amendment Act receiving royal assent in May 2023, affect the commuted value calculation when a pension plan member dies. Disability benefit allocations are part of the package of changes and the bill also “allows for the personal representative of a deceased spouse’s estate to give notice using the prescribed form, to designate the spouse as a limited member, provided the member’s pension has not commenced at the time of the spouse’s death,” the Eckler explanation note states.
The new changes, also affecting commuted values, spousal waivers and administration fees, come into effect on January 1, 2025.
Eckler concludes its briefing by encouraging plan administrators to review contract language and processes: “Plan administrators of both plans registered in British Columbia, and those with plan members that accrue pension entitlement while working in British Columbia, should review their plan texts for required amendments as well as administrative practices and statements for pension division where there is a spousal relationship breakdown.”
