New law extends pension death benefits to common law spouses

Douglas Rienzo

July 25, 2014

Julius Melnitzer, Financial Post, National Post

(Recap)

With Ontario’s budget having received royal assent on July 24, 2014, the so-called Carrigan amendments to the Pension Benefits Act have become law.

The Ontario Court of Appeal’s 2012 decision in Carrigan v. Carrigan disentitled common law spouses to pre-retirement death benefits if the deceased pension member had previously been married and was separated but not divorced from the previous spouse. Instead, the member’s named beneficiary (not necessarily the former spouse) was entitled to the benefit.

“Prior to the Carrigan decision, virtually all pension practitioners and pension administrators interpreted the PBA as requiring payment of the death benefit to the member’s common law spouse in this situation,” writes Douglas Rienzo in Osler, Hoskin & Harcourt’s Pensions & Benefits Law blog.

“Changes to s. 48 of the PBA clarify that in circumstances where a pension plan member is legally married to a spouse from whom he or she is separated, is living with a new spouse in a common law conjugal relationship, and dies prior to retirement, the common law spouse will be entitled to the pre-retirement death benefit,” Rienzo explains.

To read the article, click here. To read the complete Pensions & Benefits Law blog post, click here.

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Amendments to Ontario’s PBA become law

July 28, 2014

Staff, Benefits Canada

(Recap)

Ontario’s budget received royal assent last week and that means plans to create the Ontario Retirement Pension Plan (ORPP) will go ahead.

The budget also included changes to the Pension Benefits Act (PBA) to address the decision of the Ontario Court of Appeal in Carrigan v. Carrigan Estate.

In that case, a plan member who died was married but separated from his wife and in a conjugal relationship with someone else. Neither was entitled to the death benefit.

“Changes to s. 48 of the PBA clarify that in circumstances where a pension plan member is legally married to a spouse from whom he or she is separated, is living with a new spouse in a common law conjugal relationship, and dies prior to retirement, the common law spouse will be entitled to the pre-retirement death benefit,” writes Douglas Rienzo on Osler’s Pension & Benefits Law blog.

“Similar amendments to s. 44 of the act clarify that where a pension plan member is legally married to a spouse from whom he or she is separated, is living with a new spouse in a common law conjugal relationship, and the plan member commences a pension, the pension must be paid in a joint-and-survivor form (with the survivor pension payable to the common law spouse should he or she survive the member), unless the member and common law spouse wave this form of pension,” he writes.

To read the article, click here. To read the complete Pensions & Benefits Law blog post, click here.