Your Spouse Is Protected
When You Retire
When you retire, your pension must be offered in a
"joint and survivor" form. This option entitles your surviving spouse to a
lifetime pension of at least 60 per cent of the monthly pension paid to you. Because of
the joint and survivor arrangement, the amount of pension payable to you at retirement may
be reduced to ensure that continuing payments can be made throughout your lifetime and
also your spouse's lifetime.
You and your spouse may choose an alternative to a 60 per
cent joint and survivor pension only if your spouse signs a waiver. The waiver must be
signed in the presence of a witness and outside of your presence. As well, it must be
signed within 90 days of the commencement of your pension to be valid. Please ask your
plan administrator for the proper waiver form.
Your spouse should obtain independent legal advice before
waiving the right to a "joint and survivor" pension benefit.
Consider the following example:
You and your spouse are reviewing your retirement option
statement and are faced with selecting one of the following options:
- a single life annuity with no guarantee period that will pay
you $1,000 per month.
- a single life annuity with a guarantee period of 10 years
that will pay you $930 per month. If you die within 10 years after retirement, your
beneficiary will receive the same monthly pension, $930, for the remainder of the 10 year
period.
- a 60 per cent joint and survivor annuity that will pay you
$850 per month during your lifetime, and then $510 per month to your spouse, on your
death, for the remainder of your spouse's lifetime.
As you and your spouse work through the options, you see
that the single life annuity provides the largest monthly pension as long as you are
alive, but offers no continuing income to your spouse if your spouse survives you.
The single life annuity with a guaranteed 10 years is
payable to you for the duration of your life, and if you live more than 10 years after
retirement, it will stop at the time of your death. If you die before the 10 years expire,
the pension is payable to your spouse only for the remainder of the 10 year guaranteed
term.
The joint and survivor option provides the smallest monthly
payment to you but is payable throughout your life. Upon your death a reduced amount is
payable to your spouse for your spouse's lifetime.
If you and your spouse select the first or second option,
you spouse must sign the waiver form.
Your Spouse Is Protected If You Die Before Retirement
When plan administrators receive notification of a member's
death, the beneficiary is provided with an option statement setting out the details of the
deceased member's pension benefit, and the options available to the beneficiary.
Your spouse at the time of death must be your beneficiary.
You will find a definition of "spouse" in the glossary. If you are not survived
by a spouse, then benefits are payable to your designated beneficiary or estate.
If you die prior to being eligible
to receive a pension, then your spouse will receive a survivor
benefit which is equal to the commuted value of your accrued
pension.
If you die after becoming eligible
to receive a pension, then your spouse will receive a pension as
if you had retired on the date you died, in other words, 60 per
cent of the pension that would have been paid to you.
Your spouse may elect to receive
the survivor benefit as a lump sum payment or may transfer the
commuted value of the survivor benefit to a portability vehicle
provided under subsection 32(2) of The Pension Benefits Act,
1992.
Your spouse may waive entitlement
to the pre-retirement survivor benefit by signing a prescribed
waiver. The waiver for this purpose is
Form 2.1 - Spouse's Waiver of
Pre-Retirement Survivor Benefit Pursuant to Clause 33(6)(a) of The
Pension Benefits Act, 1992. The waiver must be signed and delivered to your plan
administrator before your date of death to be valid.
The waiver may be revoked by your
spouse if a written and signed notice of revocation is delivered to
your plan administrator before your date of death.
Benefits payable to your designated
beneficiary or estate are paid as a lump sum.
