A curious scenario today that might become more of an issue in the future is how employer sponsored retirement plans may address non-traditional households to ensure spouses are properly designated with benefit providers.
In December 2022, the Supreme Court of Justice of Colombia made a surprising decision, granting survivor pension benefits to two men involved in a polyamorous relationship with a third man for over a decade. Initially, the pension plan had denied their application and intended to give the benefits to the deceased member’s mother. The fourth partner was not eligible due to a lack of sufficient cohabitation.
Recognizing polyamorous relationships in pension benefits is uncommon. In Ontario, for instance, a spouse is typically entitled to a pre-retirement death benefit, but the definition of “spouse” implies a relationship between two people. However, some provinces have addressed the issue by prioritizing the married spouse for survivor benefits, which does not consider polyamorous relationships with multiple partners.
In a separate case in British Columbia, the court recognized a child’s legal parents in a polyamorous relationship, highlighting the need for legal recognition of diverse family structures.
Different challenges arise when recognizing polyamorous relationships in the context of pension and benefits compared to recognizing the relationship between a child and the polyamorous partners of their biological parents. Adjusting premiums based on the number of beneficiaries or exploring alternative arrangements could be potential solutions.
The current process for polyamorous pension plan members to secure entitlements for all partners is burdensome and does not offer complete spousal protection. Updating paperwork and addressing joint and survivor pension benefits are additional challenges. Statutory prohibitions on assigning pension benefits further complicate potential solutions.
Legislation in many jurisdictions does not adequately account for polyamorous families in the context of pensions, reflecting an oversight or misstep by the legislature.
Plan sponsors and providers alike will have to navigate the ongoing evolution of cultural norms and many legacy practices will need thoughtful consideration over time. Another reason why choosing a benefits specialist consultant is key for supporting this critical aspect of your total rewards strategy.