Beneficiaries Under the Pension Plan
Anyone can be named as your pension plan beneficiary but this designation is subject to certain restrictions under the Ontario Pension Benefits Act:
One of the requirements under the Act relates specifically to the rights of a surviving spouse (as defined below): if a member of any Ontario pension plan dies prior to initiating pension payments, and there is a surviving spouse as of the date of death, the law clearly provides that regardless of any prior beneficiary designation (including a will), the spouse is entitled to receive either a lump sum payment or a deferred pension (pre-retirement death benefits);
- Under these circumstances, should you wish for someone other than your spouse to be the beneficiary of your pre-retirement death benefits, then the Spousal Waiver MUST BE COMPLETED by both you and your spouse and you must complete a Beneficiary Change Form.
CAUTION: Recent case law in Ontario has determined that a common-law spouse is not automatically the surviving “spouse” for purposes of entitlement to the pre-retirement death benefits if a plan member also has a married (but not divorced) spouse who is living separate and apart from the member.
As a result of this recent case law, if you have a common-law spouse (as defined below) and you want your common-law spouse to be the beneficiary of your pre-retirement death benefits,but are not yet divorced from your married spouse, then you MUST complete the Beneficiary Designation Form and specifically designate your common-law spouse as your beneficiary for pension purposes.
In order to ensure compliance with current law, we also require that you complete the Declaration of Marital Status section of the Beneficiary Change Form.
A spouse is defined in the Pension Benefits Act as being a person who:
is married to you and not living separate and apart from you; or
with whom you have been:
in a conjugal relationship and co-habited for a minimum of three years prior to this declaration; or
In a relationship of some permanence as the natural or adoptive parents of a child, as defined in the Family Law Act (Ontario).
Minor Children as Beneficiaries – General Information
If a minor child is named as beneficiary in the absence of a named trustee and the staff member dies before the child is 18, the proceeds may have to be paid to the Province’s Official Guardian and held in trust. A trustee may be appointed via the Beneficiary Change Form, and such appointment will remain valid once the beneficiary reaches the age of majority unless a trustee expiration date is provided.
Plan members are urged to check their beneficiary designation periodically to ensure it reflects current estate requirements.