Deceased's entitlement to portion of net family property post-divorce includes pension benefits
The Court of Appeal for Ontario has held that neither the Pension Benefits Act, RSO 1990 c. P.8 (PBA) nor the Family Law Act, RSO 1990 c. F.3 (FLA) preclude the parties from agreeing to, a court from ordering or an arbitrator from awarding a continuation of shared pension benefits to the deceased non-member’s estate for the balance of the member spouse’s life.
In Meloche v. Meloche, 2021 ONCA 640, the appellant filed an application for divorce and equalization of net family properties. In doing so, he also brought a motion to decide the division of the respondent’s pension payments, which dividing at source, would amount to roughly half of the respondent’s monthly pensions. However, the parties disagree on what should happen to the pension payments following the appellant’s death, which appeared to be imminent. The appellant argued that it should continue to his estate for the remainder of the respondent’s lifetime. The respondent argued otherwise, stating that following the appellant’s death, his share must revert to her. The appellant passed shortly after the motion ruling was released.
Superior Court Justice Kirk Munroe denied the appellant’s motion, stating that the PBA foreclosed the relief sought by the appellant. He interpreted the provisions of the PBA to mean that “the non-member spouse would be guaranteed continued pension payments … on the death of the pension holder, but that any pension payments would end … on his or her death.”
The Court disagreed. While the PBA is undoubtedly important in resolving this issue, it is necessary to look to both the PBA and the FLA. When read as a cohesive whole, it becomes clear that nothing precludes the parties from agreeing, a court ordering, or an arbitrator awarding that the share of pension payments at source shall continue to the non-member spouse’s estate after the spouse’s death.
The respondent’s arguments relied heavily on the sense that a pension payment, by its very nature, does not continue after death, which of course is true, said the Court. However, the issue here is not whether she will continue to receive pension payments after the appellant’s death. Rather, the issue is whether the division of pension payments could continue to the former’s estate for the balance of the latter’s lifetime, given the appellant’s entitlement to half the difference between his and the respondent’s net family properties under the FLA.
“There is nothing in the PBA that precludes pension payments divided at source from continuing to the estate of a non-member spouse during the lifetime of the member spouse, in the event that the non-member spouse predeceases the member spouse,” the Court said.