Breaking up is hard to do

A look at 3 cases involving spousal entitlements and the implications for pension plan sponsors
By Allyson Marta
|Canadian HR Reporter|Last Updated: 05/17/2013

For pension plan sponsors, navigating an employee’s relationship status is a potentially costly reality. Often, the plan sponsor is also the plan administrator so it stands in a fiduciary position to plan members. That means it must ensure payments from the pension fund are made only if there are entitlements to benefits under applicable legislation and the terms of the plan.

One area of benefit entitlement that poses a particular challenge for plan administrators is the benefit entitlements of spouses and former spouses. This area of pension law has become increasingly complex as relationship breakdowns, cohabitation and remarriages are more common, and the definition of spouse has broadened.

Often, more than one person claims to be a member’s spouse or former spouse who may be entitled to a benefit under the plan, and the plan administrator may be party to litigation involving claimants with respect to the pension benefits.