It's rather unfair to take away the value of the commuted pension since the contributions to it represent very real money out of her pocket every pay and on top of that severely limit their RRSP room. She's paying dearly for that pension, so it should be counted as part of their assets.  Also, to calm your nerves, the good news is that public pensions are actually quite solvent and on very solid ground, and I'm sure you'll be happy to know that barring a meltdown of our entire financial system no major tectonic changes or other continental plate disasters are being forecast.