Spousal protection under pension plans

Death benefits

When you die, any benefits payable from a pension plan, locked-in retirement account, or life income fund will be automatically payable to your spouse or common-law partner. If you do not have a spouse or common-law partner, the death benefits are payable to your designated beneficiary. If you have not named a beneficiary, death benefits will go to your estate. If you have a spouse or common-law partner and designate another person as your beneficiary under a pension plan, locked-in retirement account or life income fund, the beneficiary designation is not recognized. The death benefit is still payable to the spouse or common-law partner.

Joint and survivor pensions

If you have a spouse or common-law partner when you retire, your pension must be payable as a joint and survivor pension. This means that your pension will be payable in its full value up to your death. When you die, a specified percentage of your pension will continue to be paid to your spouse up to their death. This percentage is set out in your plan and must be at least 60%.

For example:

Alice retires at 65 with a joint and 75% survivor pension of $900 per month. If she dies at 72, her common-law partner Fred will continue to receive a monthly pension of $675 which is 75% of $900.

If you have a spouse or common-law partner, you can only elect to have your pension payable in a non-joint and survivor form if your spouse or common-law partner has waived their rights to your pension. To do this, they must sign a Waiver of Joint and Survivor Pension Form in the 12-month period before the pension starts. This is Form 6 in the regulations.

Division of pension benefits on relationship breakdown

If your marriage or common law relationship ends, your pension funds might need to be shared with the other person. The Pension Benefits Act calls this subject to division. This provision applies if your marriage or common-law relationship ends while you:

• are a member of a pension plan
• have a locked-in retirement account or life income fund or
• are receiving a pension from a pension plan