Re: Surviving Spouse
Under both the Pension Benefits Act of Ontario and the Federal Pension Benefits Standards Act, (Plans are usually registered Federally if they are engaged in interprovincial business, such as banking, transportation, fur trade, etc.), the normal form of pension annuity is a joint and survivor ,(J&S),pension, payable for the full lifetimes of the annuitant and spouse, with not less than 60% continuation to the survivor on death.
If the annuitant wishes to receive a form of life pension that doesn't meet these conditions, the spouse must first sign a waiver form which acknowledges that a pension payable jointly with 60% continuation was offered, but the spouse waives entitlement to the manditory continuing life benefits.
Spousal waivers are very common when the spouse is somewhat older than the annuitant, or where the spouse's person pension or assets far exceed those of the annuitant. Many men sign away the joint annuitant benefits for their spouse's personal pension plan.
If the spouse has signed the waiver, the annuitant is under no obligation to name the spouse as beneficiary of any guaranteed payments. A typical pension which is not J&S is single life, with a minimum of five or ten years of payments guaranteed.
There is no problem with a J&S pension with more than 60% continuation to the surviving joint annuitant, and it is possible, though uncommon, to have a J&S pension which reduced to 60% continuation on the death of either the annuitant or the surviving spouse.
Legislation no longer allows for a J&S pension with someone other than a spouse as the joint annuitant,such as a dependent, relative, friend, or partner who does not meet the legislation's definition of a spouse, (a recent commonlaw spousal arrangement, for instance).
The determination of who is the spouse is made at the earlier of the date of pension commencement or the date of the annuitant's death.
Ontario Provincial and Federal pension legislation have different definitions of who is the spouse, and the hierarchy of recognition, if there is more than one person who might be considered the spouse. Under Federal legislation, the first recognized spouse would be a person with whom the annuitant has cohabited in a conjugal relationship, having cohabited for at least one year. If no one meets that definition, the Plan would recognize the person who is legally married to the annuitant as being the spouse.
What this means is that, if you are separated, but not divorced, the spouse from whom you are separated is recognized as having the spousal rights, unless you are in a commonlaw relationship that meets the legislation's definition of commonlaw, at the time of pension commencement. For Ontario legislation, I think it's two years commonlaw, or if the annuitant and spoouse have had one or more children together.
The joint annuitant cannot be changed after the pension starts. If the spouse dies, and the annuitant has a new spouse later in life, benefits will end on the annuitant's death. If the annuitant and spouse part ways after the pension starts, that spouse will still receive the continuing benefits for life, if the annuitant dies. The vindictive annuitant thereby has additional incentive to outlive the spouse.
The amount of pension payable in J&S form may be equal to, or actuarially equivalent to, the normal form of pension under the plan. If it's actuarially equivalent, the amount of pension in the normal actuarial form will be multipled by a percentage which is based on the ages of both the member and spouse at the time of pension commencement, mortality statistics, (ie: the averge remaining lifetimes of people from a given age onward), and the interest rate assumptions used by the actuary.
