How Did Pre-Retirement Death Benefits Work Prior to
Prior to the Ontario Court of Appeal decision in the
Carrigan case, it was commonly accepted that if a pension
plan member died prior to retirement, then the member's spouse
on the date of death was entitled to the pre-retirement death
benefit, unless the member and spouse were living separate and
apart or the spouse had waived entitlement to the benefit. Under
the PBA, "spouse" means, except where otherwise indicated
in the PBA, either of two persons who,
a. are married to each other, or
b. are not married to each other and are living together in a
i. continuously for a period of not less than three years,
ii. in a relationship of some permanence, if they are the
natural or adoptive parents of a child, both as defined in the
Family Law Act;
This definition of spouse includes same-sex and "common
Ontario Court of Appeal Decision
In the Carrigan case, Ronald Carrigan, the plan member,
died prior to retirement. At the time of his death, there were two
individuals potentially entitled to the pre-retirement death
benefit as his "spouse": (1) Melodee Carrigan, who was
legally married to Ronald but from whom he had separated; and (2)
Jennifer Quinn, who had been living in a conjugal relationship with
Ronald for about eight years prior to his death.
The Court of Appeal interpreted the PBA in a very narrow and
technical manner, concluding as follows:
Melodee was not
entitled to the death benefit, because she was living separate and
apart from Ronald at the time of his death (that conclusion was not
Jennifer qualified as a "spouse" under the PBA and was
not living separate and apart from Ronald at the time of his death,
because Ronald had never divorced Melodee but had only separated
from her, Jennifer was not entitled to the death benefit
Since there was no
qualifying spouse, the death benefit should be paid to Ronald's
The Court of Appeal's decision contradicted the
understanding under which everyone in the pension industry had been
operating – that in such circumstances the common law spouse,
Jennifer, would be entitled to the death benefit.
What Are the Implications?
The Carrigan case changed not only how pension plan
administrators must pay pre-retirement death benefits in the
future, it also called into question past payments of
pre-retirement death benefits which had been made in similar
circumstances, creating the risk of legal claims from deceased
members' named beneficiaries or estates.
The Carrigan case also raised serious questions about
the interpretation of other provisions of the PBA, notably the
provision requiring that where a member has a qualifying spouse on
the date of retirement, the pension must be paid in joint and
survivor form unless waived by the spouses. The decision in
Carrigan suggested that this requirement would not apply
where the qualifying spouse is a common law spouse, and the member
has a legally-married spouse from whom the member is separated.
Given that the Supreme Court has refused to grant leave to
appeal, pending any amendments to the PBA, the Ontario Court of
Appeal decision must now be applied by pension plan administrators.
In particular, plan administrators should consider reviewing plan
communication materials and providing checklists and training for
staff to deal with member queries related to death benefits. Plan
members may also want to consider their personal circumstances and
whether any steps need to be taken (such as obtaining a divorce
where a separation has occurred) in order to manage their pension
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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