Pension Benefits for Common Law Spouses

In today's video, we'll be discussing some recent changes to the Pension Benefits Act, and how the changes will impact common law spouses.

Hi, my name is Shilpa Mehta and I am an associate with Feldstein Family Law Group. During today’s video blog, I will be discussing some recent changes to the Pension Benefits Act, and specifically, how the changes will impact common law spouses.

In 2012, major amendments were made to the Pension Benefits Act, allowing pension plan members who have to pay their former spouse a settlement based on the value of their pension plan, to make some or all of the payment from the pension plan itself. The 2012 legislation also applies to unmarried or common law spouses provided that they agree to share the value of the pension plan following separation. For further information on the amendments made to the Pension Benefits Act in 2012, please review Andrew Feldstein’s video blog entitled “Out of Province Pensions.”

The 2014 amendments to the Pension Benefits Act, entitled the “Carrigan” amendments, are the result of a 2012 Ontario Court of Appeal Case, Carrigan v Carrigan Estate. In that case, the Court of Appeal reviewed a decision of the trial judge finding that the deceased’s common law spouse, and not the deceased’s married spouse and her two daughters, was entitled to the deceased’s pre-retirement benefits.

The Court of Appeal ultimately held that a common law spouse is not entitled to pre-retirement benefits if the deceased pension plan member was previously married and was separated but failed to obtain a divorce from their previous spouse.

Prior to the release of the Carrigan decision, however, almost all pension administrators had interpreted the Pension Benefits Act as requiring the death benefits to be paid to the plan member’s common law spouse in such a situation.

As a result of the confusion, the Legislature sought to clarify the interpretation of the law. Section 48(6) of the Pension Benefits Act, amended in 2014, now specifically states that a plan member may designate a beneficiary other than their spouse if the plan member is living separate and apart from his or her spouse on the date of death. Accordingly, a common law spouse may be designated, thus disentitling the married spouse, even where the plan member has not obtained a divorce.

If you require further information regarding the equalization of pension plans and would like to discuss entitlement to property as either a married or common law spouse, please contact us at (905) 581-7222 to schedule a consultation.

Thank you for taking the time to watch this presentation, and I hope that you have found it helpful. For more information about separation and pensions, please also visit our website.

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