Families fought to recover pension and death benefits after funds were wrongly deposited elsewhere
Canadian families expecting pension or survivor benefits have instead been left to fight for misdirected funds, revealing ongoing issues in the country's banking transfer system and its intersection with benefit payments.
In a recent CBC article, the family of James Kashman, a long-time lawyer and judge, sought to transfer his $15,000 survivor benefit to his widow after his death.
The funds were deposited into a stranger’s account after CIBC allegedly gave the family the wrong transit number during a branch transition.
Although the bank initially recovered only $3,000 and dismissed further responsibility through its complaint and appeals process, it reversed its stance and refunded the full amount after media intervention.
The family said they received a warning not to use the new transit number only after Kashman’s death, delivered to his inactive email.
In another case reported by CBC last year February, Dobrinka Gueorguieva, a widowed hospital cleaner in Ottawa, found that her pension cheques had been deposited into another person’s account while she travelled abroad to spread her late husband's ashes.
CIBC later told her the account number on her void cheque had been “recycled” after the branch moved locations.
While the bank recovered only the most recent three of five deposits, Gueorguieva was told to pursue the remaining $1,139.71 in court.
She later moved her accounts to RBC after the full sum was refunded following CBC’s inquiries.
Systemic weaknesses were also exposed in a separate incident covered by Wealth Professional, where Ontario residents Barbara and Robert Behan attempted to send $10,000 via wire transfer to their son’s CIBC account.
The funds were mistakenly placed in a stranger’s account with a matching number. CIBC argued the problem was caused by the wrong transit number being used.
The couple was initially offered half the funds as a goodwill gesture after the bank ruled it was not at fault. Full reimbursement came only after CBC’s Go Public contacted CIBC.
According to Werner Antweiler of the University of British Columbia’s Sauder School of Business, Canada’s current system for wire transfers—including the Lynx system used by most major banks—leaves too much room for error.
He stated that “a simple mistake can get compounded very quickly” and contrasted this with the IBAN system used abroad, which includes built-in error detection.
Long-standing issues with pension access have also been highlighted in other reported cases.
According to the Pension Rights Center, Elaine Silverberg spent 13 years trying to claim her late husband’s widow’s pension from his former employer.
The pension plan denied her claim due to a lack of documentation proving her husband elected survivor benefits before his death in 1988.
Silverberg ultimately received the estimated $53,000 not from the plan but through unsolicited donations from strangers who read about her case in the New York Post.
Recent legislative changes are expected to improve aspects of pension contributions.
In a 2023 Benefits and Pensions Monitor article, federal Bill C-47 amended the Income Tax Act to allow under-contribution corrections in Defined Contribution (DC) pension plans via a permitted corrective contribution (PCC), which is not subject to the annual contribution limit.
Over-contribution refunds are now supported through a pension adjustment correction (PAC), which can restore an employee’s RRSP deduction room and allow distribution of reasonable investment returns.
According to Superintendent of Financial Institutions Peter Routledge, these changes aim to reinforce public trust in Canada’s financial system.
