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FSCO issues spousal waiver form, FAQs for non-residency unlocking from a pension plan

On May 28, 2019, the Financial Services Commission of Ontario (FSCO) released a new Form 4.2 and published a Frequently Asked Questions document (FAQ) on non-residency unlocking from a registered pension plan for Ontario members.


As of December 6, 2018, the Ontario Pension Benefits Act (PBA) has been amended to permit a pension plan to provide for payment of the commuted value of a deferred pension to an Ontario former member if the former member is a non-resident of Canada under the Income Tax Act (Canada). Non-residency unlocking was previously only permitted from lockedin retirement savings vehicles. Non-residency unlocking is not available for active or retired members.

Required spousal waiver form

In order to permit such unlocking, if the former member has a spouse who is not living separate and apart from the former member, the spouse must waive any rights to a spousal survivor benefit in the form approved by the Superintendent. FSCO has now released Form 4.2 to allow plans to meet this requirement. Form 4.2 must be used in order to satisfy the legal requirement for a spousal waiver.

Other information in the FAQ

The FAQ clarifies that plans are not required to provide non-residency unlocking to their members. Pension plan sponsors that wish to provide this option will have to amend their plan texts to make nonresidency unlocking available under the terms of the plan, if the plan text does not already permit it.

FSCO recommends administrators of plans that allow for non-residency unlocking document their process for determining whether a former member qualifies as a non-resident. It is the pension plan administrator’s responsibility to determine whether a former member is a non-resident for the purposes of the Income Tax Act (Canada).

FSCO suggests that former members who are considering unlocking the commuted value of a deferred pension should be encouraged to obtain independent legal and tax advice regarding the tax consequences of such a decision.


The introduction of non-residency unlocking for Ontario pension plan members is likely to affect only a small number of Ontario former members who have moved outside of Canada. However, it is a useful option for pension plans to provide. Employers with Ontario members in their pension plans may wish to amend their pension plan texts to provide this option.

News & Views - July 2019 (PDF)