Saskatchewan common law spouse loses claim against employer for pension death benefits
In most provinces of Canada, a legally married spouse loses the automatic right to a pension plan member’s death benefits upon separation, either immediately or after a period of time. In Saskatchewan, however, a legally married spouse does not lose those rights after separation and, furthermore, takes precedence over the rights of a subsequent common-law spouse. Although ultimately unsuccessful, a recent case brought by a common-law spouse against a pension plan administrator in Boreen v. Mosaic Esterhazy Holdings ULC1 illustrates the importance of providing clear and correct information to pension plan members and their spouses in such situations.
Ms. Boreen was the common law spouse of Mr. Holmes, a deceased plan member of the Mosaic Pension Plan. At the date of Mr. Holmes’ death, he was still legally married to another woman, Ms. Holmes. After separating in 1993, Mr. and Ms. Holmes had not entered into a separation agreement, nor did they divorce.
In 2013, Mr. Holmes learned of a terminal illness and contacted Mosaic’s human resource department about changing his designated beneficiary under his pension plan to include his common law spouse. A Declaration of Spousal Status form was provided to Mr. Holmes. In the form, Mr. Holmes designated his common law spouse as the beneficiary, and indicated that his legal spouse was "not entitled to receive any portion of [his] benefits under the terms of a court order or interspousal agreement".
The pension plan administrator correctly advised Mr. Holmes that Ms. Holmes would be entitled to receive the pre-retirement death benefits at his death if they were still legally married and she did not waive her entitlement. Mr. Holmes was also advised to seek legal advice on the matter. However, Mr. Holmes took no further steps to pursue either option, although he did attempt to split the pension between Ms. Holmes, Ms. Boreen and his children using a will. In January 2014, Mr. Holmes received a pension statement which listed his common law spouse as the named beneficiary under the Plan.
In August 2014, Mr. Holmes passed away and Ms. Holmes requested the pre-retirement death benefits be paid to her. Ms. Holmes successfully claimed the death benefits, as Saskatchewan pension legislation gave precedence to the legally married spouse over any named beneficiary2
The common-law spouse’s claim against the administrator
In August 2015, the common law spouse commenced an action against various defendants related to the matter, including a claim against the employer for negligent misrepresentation. A claim for negligent representation requires a number of elements, including an untrue or misleading representation, negligent communication, reasonable reliance by the recipient of the information, and damages.
The trial judge found that the member had been given accurate information by the pension plan administrator. He had been advised of the actions that he needed to take to assign the pension benefits to his common-law spouse and had been advised to obtain legal advice, but he did not do so. It was his actions that resulted in the death benefit going to the legally married spouse. Furthermore, the legally married spouse was also aware that further actions needed to be taken if she was to receive the death benefits.
The Court of Appeal rejected Ms. Boreen’s appeal and awarded costs to the pension plan administrator. In addition to its endorsement of the trial judge’s reasoning, the Court of Appeal noted that the pension statement was provided to the member and not to the common law spouse, and it was required to include the member’s designated beneficiary under the plan. The reporting of the designated beneficiary on the pension statement was not a representation that the designated beneficiary would actually receive the death benefits.
The case illustrates the importance of a number of factors in pension plan administration. The pension plan administrator provided accurate and complete information to the plan member and was able to establish that it did so. The member was advised to obtain legal advice and chose not to do so. Furthermore, the pension statement provided accurate information about the member’s entitlements.
The case also illustrates the importance for pension plan members, as well as separated and common law spouses, to understand their entitlements and responsibilities in complex marital situations, which can vary depending on the jurisdiction of employment and the facts. It is ultimately the responsibility of pension plan members to understand their personal situations and the pension entitlements after they pass away, and to act on that information in accordance with the law and their wishes.
1 Boreen v Mosaic Esterhazy Holdings ULC, 2020 SKCA 132.
2 Holmes v Boreen,  SKQB 333.