Air Canada Refuses to Divide Pilots’ Pensions With Their Former Spouses

In a case from B.C.’s Supreme Court, Canada’s national airline has been ordered to comply with B.C.’s Family Relations Act and divide a pilot’s Air Canada supplemental pension with his estranged wife.

In most jurisdictions, including British Columbia, employment pensions earned by a spouse during a marriage are divisible family assets. In Jarman v. Jarman 2011 BCSC 1155, Air Canada argued it was not subject to the law on pension division with respect to pilots’ regular pensions or their supplemental pensions and that each individual pilot, who is obliged to retire at age 60, is responsible for compensating their spouse, without the airline’s participation in dividing the pension.

The law in B.C. provides that after receipt of a court order or an agreement dividing an employee’s pension, the employer must carve out of their employee’s pension a separate pension account that is payable to their employee’s spouse. An employee’s spouse is then treated like a member of the pension plan, albeit a “limited member” and receives pension cheques directly from the pension administrator.

Air Canada argued that its administrative policies provide that their pilots must, at their own expense, obtain an actuarial value of their pensions and pay their spouse directly. Upon the death of a pilot, the pilot’s former spouse must look to the pilot’s new wife or partner to continue to receive their monthly portion of their ex-husband’s pension.

Counsel for Ms. Jarman pointed out the folly of the airline’s directive and the awkward position of a divorced spouse who must count on her former husband/wife to pay out the pension or her former husband/wife’s new partner. Mr. Jarman’s lawyer agreed.

The Court rejected Air Canada’s argument that it was “administratively impossible” for the airline to comply with the law, citing several other cases that had previously rejected Air Canada’s argument.

Only a taxpayer-funded airline would waste its money fighting this law. Yes, we are paying for Air Canada’s legal battles. I only hope they are not all as frivolous as this one.

Lawdiva aka Georgialee Lang

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3 thoughts on “Air Canada Refuses to Divide Pilots’ Pensions With Their Former Spouses

  1. Which actuary would you hire to evaluate the pension for Ms. Jarman?

    I agree with you that Air Canada wasted the tax payer’s money taking this issue to trial in BC. Will this BCSC decision lead estranged and divorced spouses in Canada who have not received their share of their x-spouses Air Canada pension be able to now apply for it?

  2. Thank you for publicizing this case on which I acted for the successful spouse. i understand there are other federal employers who also do not comply with Part VI and I am happy to share my written argument and case authorities with other counsel. Contact Angela Thiele at athiele@lklaw.ca.

  3. Hi there, sorry to leave an unrelated comment, but I couldn’t find any contact info for you. I’m wondering if you’d be interested in a guest post. Please drop me an e-mail. Thanks!

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