Locked in Annuities | RRSPs and RRIFs | Discussion forum

Disaclaimer: I am NOT a lawyer nor an expert in anything (other than using Google to find forms);

I found Form 3 from the FSCO and my reading of it says you are waiving your mandated right to a suvivor pension relative to the pension (annuity) your wife would be applying for.

The salient language from the form follows:

We understand that section 44 of the Pension Benefits Act provides that the pension paid to the member or former member from the
Name of pension plan

Name of pension plan

must be paid as a joint and survivor pension if we are spouses on the date that the payment of the first instalment of the pension is due and if we are not living separate and apart at that time. We also understand that the amount of pension payable to the surviving spouse must not be less than 60% of the pension paid to the member or former member while we are both alive.

We understand that we may waive our right to the joint and survivor pension provided by section 44 of the Pension Benefits Act by signing this waiver.

We understand that by signing this waiver, the spouse is giving up the right to a survivor pension on the death of the member or former member, as provided by Section 44 of the Pension Benefits Act.

We hereby waive our right to a joint and survivor pension provided by section 44 of the Pension Benefits Act by signing this waiver in the presence of a witness.

We understand that we may cancel this waiver at any time before the date of the commencement of payment of the member’s or former member’s pension.

So, my reading of this boils down to:

If one were to be elegible for a pension AND
One had a spouse on the date the first payment was due AND
The spouse dies THEN

The surviving spouse is entitled to a legally mandated survivor pension of not less than 60% of the orginal BUT
The surviving spouse can waive Section 44 (which must be the section that mandates the survivor pension) prior to the first payment.

When you fill out this waiver form you are also referring to a blank line which is titled "Name of pension plan" -- so, I suspect this would clearly name the plan and thus would NOT be applicable to any other plan.

At the very bottom of the form it says:

NOTE: Prior to completing this form, each party should consider obtaining independent legal advice concerning their individual rights and the effect of this waiver.

and as I said at the beginning of this message: I am NOT a lawyer nor an expert in anything.

GS

I also think SD is right in saying that with a single life annuity with 20-yr guarantee, the amount that it pays out will have been calculated based on her age and gender, not yours. If she dies before the time is up, her beneficiary (presumably you) ought to get whatever was remaining of the 20 years, but you should read that wording carefully to make sure that this is what is meant by "guarantee".

FSCO is an Ontario government agency. CPP is Federal.

The thing you are being asked to sign is needed because it's a locked-in account, as far as I know. They would need you to waive it so that the rules governing the annuity can take precedence, i.e. the 20yr single life etc. rather than the other arrangement normally mandated by law. The fact that the FSCO provides such a form suggests that this is entirely legitimate. However, it also means that if you did not agree, then she couldn't do it. It would appear that if you don't sign it, you have some other entitlement to that locked-in LRIF if she dies first which is enshrined in Section 44. I don't really know what Section 44 says, but I think all the laws of Ontario are online somewhere and you should be able to look it up. It appears that it would entitle you to 60% of "the pension", whatever that might mean in this circumstance.

Again, I am not a professional, but I don't see any problem with signing it as long as you are agreeable to your wife using this money to buy this kind of annuity. I think that's what it's really about. In that sense it might be considered irrelevant.

The part about telling you that you might want to consult a lawyer is there primarily because the financial institution's lawyers told them to put it there. They don't want any risk of anyone saying they didn't know what they are signing etc. and then suing them later.

Nazirji, I had a look at the Form 3 - Waiver of Joint and Survivor pension from FSCO's web site.

I'm guessing that SunLife requires the form to be signed for the transaction because

1. the money is from a LIF locked-in account with rules that require the money to purchase a "joint and survivor pension" should the pension member have a spouse at the time the annuity is purchased, and
2. she is trying to purchase a single life annuity instead of a joint-life one.

An inexpensive way to confirm this would be to ask SunLife if the Form 3 would still be needed if a joint-life annuity were purchased instead.