Spouse and Common-Law Partner Pension Benefits

Revised January 2002

The main objective of the Pension Benefits Act is to safeguard employees' rights to benefits promised under private pension plans. Over the years, the rights of employees to obtain information have increased. There is now more protection for the spouse or common-law partner of a contributing member. In addition, employees who leave their jobs now have new options regarding transfers of their pension credits.

Every pension plan must provide that the pension payable to a plan member with a spouse or common-law partner must be in the form of a joint pension. This pension will reduce to not less than two-thirds on the death of either spouse or partner.

This protects the spouse or common-law partner in the event of the member's death, by guaranteeing continued payments equaling at least two-thirds of the original pension income.

Can a spouse's or common-law partner's  pension benefit be discontinued upon resuming cohabitation?

No. The spouse's or common-law partner's pension will continue without reduction upon resuming cohabitation.

Is this legislation compulsory?

Yes. However, this provision may be waived only by the spouse or common-law partner of the member if he/she so desires. In order to waive their right to the pension benefit, the spouse or partner must complete a "Pension Waiver Form" (MG-1701) no more than 15 days after receipt of a retirement statement. The plan member may then be allowed to choose another form of pension payment.

Where can a "Pension Waiver Form" (MG-1701) be obtained?

All employers and pension plan administrators such as insurance companies, trust companies and consulting firms should have copies of this form. One may also obtain copies from the Manitoba Pension Commission office. The waiver must be signed by both spouses or common-law partners independent of each other, and witnessed by a non-relative to ensure that the spouse or partner can obtain independent information and understands the implications of signing.

How does the type of pension chosen affect the amount of pension income received upon retirement?

In general, the more coverage a pensioner's spouse or common-law partner receives, the lower their monthly pension income will be.

The following example will show how this reduction will work as compared to other forms of payment. (Assume the plan member is 65, the spouse or common-law partner is 60, and the normal form of pension under the plan is a Life Pension.)

It is necessary to reduce the normal form of monthly pension payment in order to provide a pension payable for two lives rather than one.

Normal Form Monthly of Pension Pension Income
Life Pension (payable only while pensioner lives) ... $500.00

Optional Form Without  Joint Pension

Life Pension-
Guaranteed 10 years
(payable while pensioner lives but guaranteed for 10 years regardless) ... $473.00

With Joint Pension
Joint and Survivor Pension (payable while pensioner lives and reduces to $284.00/month at the death of either spouse or common-law partner) ... $426.00