The Ontario Court of Appeal released two decisions recently concerning pension plan administration. The issues addressed by the court are precisely those that every pension plan sponsor, pension committee and pension plan administrator should be alert to.
The court’s decision in Smith v. Casco Inc. 2011 ONCA 306, released on April 20, 2011, concerned the use of a pension benefit waiver form that had been designed by the employer, Casco Inc. The purpose of the waiver was to permit a pension plan member and the member’s spouse to waive entitlement to an automatic lifetime joint and survivor pension under which the spouse would be entitled to 60% of the member’s pension upon the death of the member.
In this case, the plan member decided to retire after 39 years of service. In advance of doing so, he signed a pension option election form and selected one of fourteen payment options. The option he selected was a lifetime pension with a five-year guarantee of pension payments, with no lifetime survivor pension to his spouse in the event he predeceased his spouse. The member and his spouse had also signed a joint and survivor benefit waiver form under which the lifetime survivor pension for the benefit of the spouse was waived.
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