Where the death of a plan member or LIRA contract owner occurs prior to retirement, the surviving spouse is entitled to the pre-retirement death benefit payable under the pension plan or the LIRA contract.  If there is no surviving spouse, or the spouse has waived entitlement to the pre-retirement death by signing a prescribed waiver before the date of death, the death benefit is paid as a lump sum to a designated beneficiary.  If there is no designated beneficiary, the death benefit is paid as a lump sum to the estate of the deceased individual.

Subsection 33(3) of the Act and subsection 29(4) of the Regulations provide that the surviving spouse may elect to receive a lump sum payment in lieu of a pension or a transfer to a locked-in retirement arrangement provided under Section 32 of the Act.

For further details concerning the pre-retirement death benefit payable under a pension plan or a LIRA contract, please refer to our bulletin, Understanding the Pension Benefits Act, 1992 – A Guide for Members or Retirement Options.

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