When thinking about survivor benefits for your loved ones, it is important to know who is eligible and what survivor benefits are payable.
Eligible Survivor(s)
In the event of your death, your surviving spouse, eligible children, or dependants may be automatically entitled to receive a survivor pension. You do not have to designate them as your beneficiary(ies). These survivors are defined as follows:
Spouse
Either of two persons who:
- Are married to each other, or
- Are registered domestic partners, or
- Are cohabiting in a relationship and have cohabited in that relationship for at least three years.
Eligible Child(ren)
- Your natural or adopted child(ren) or child(ren) for which you are a legal guardian; and
- Your child(ren) must be under age 18 or between 18 and 25 and are in full-time attendance at a recognized educational institution.
Dependant(s)
An individual defined by the TPP regulations who is by reason of mental or physical disability, fully dependent on you for financial support and considered a dependant by CRA for income tax purposes.
Designated beneficiary(ies):
If you do not have a spouse, eligible children or dependant as defined above, you can designate a beneficiary.
A designated beneficiary is any person who is not a survivor as defined above or can be an incorporated organization such as a charity.
If you die prior to retirement:
The following chart outlines what survivor benefits* are paid in the event of your death:
| 1. | Your surviving spouse and eligible children (subject to age restrictions) are the first in line to receive a survivor pension at the time of your death.
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| 2. | If you do not have a surviving spouse, eligible children (subject to age restrictions) or dependants (as defined in the Plan) will receive a survivor pension that would have been paid to your spouse, as long as they qualify. This is in addition to the children’s pension that they may also be eligible to receive. |
| 3. | If you do not have a surviving spouse, eligible children, or dependants, a refund of your contributions plus interest will be paid to your designated beneficiary or estate as a one time lump sum payment. You can name any person, organization, or your estate as a beneficiary. |
IMPORTANT:
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* Survivor Benefits are subject to limits in accordance with the Income Tax Act (Canada)
If you die after retirement:
When you retire, you will have the option to choose a slight reduction in your pension in return for a guarantee and/or enhanced survivor’s pension.
Your Survivor Pension Options at Retirement:
You may choose one or both of the following
| A. | Choose a survivor pension as a percentage of your pension: Note: The higher the percentage, the greater the reduction to your pension. |
| B. | Select a guarantee period that your pension will be paid for. If you select one of the guarantee periods, the TPP will continue to pay your pension at the rate at which it was originally paid to you for the remainder of the guarantee period, even if you die before the end of the guarantee period. NOTE: Payment to a designated beneficiary will be in the form of a lump sum equal to the value of the pension payments for the remaining guarantee period. |
IMPORTANT:
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The guarantee period
The guarantee period refers to the minimum period for which your pension will be paid, regardless of when you die.
If you select one of the guarantee periods, the TPP will continue to pay your pension to your survivor at the rate which it was originally paid to you for the remainder of the guarantee period, even if you die before the end of the guarantee period.
Examples:
1. At retirement, a member selects an 80% survivor option and a 10-year guarantee period and then dies four years after retirement. This means that their pension is paid for four years (until their death) and continues to be paid at 100% to their surviving spouse for the next six years (the remainder of the guarantee period). The surviving spouse’s pension then reduces to 80% of the pension for the remainder of their lifetime.
2. Given the same elected survivor pension option as in example 1. above, if that member died 12 years after retirement, their pension is paid to them at 100% for twelve years. Upon the member’s death, the surviving spouse receives 80% of the pension for the remainder of their lifetime.
Note that your pension is made up of two components: a lifetime pension and a bridge benefit which is payable only until you reach or would have reached age 65. The bridge benefit is considered in determining the surviving spouse’s pension over their lifetime.
Rules and Conditions
1. You must make an election no earlier than three months before your retirement date. You will elect your option as part of your application for a pension.
2. If you elect an option and die before your retirement date, the election is still valid.
3. If you elect an enhanced survivor pension option and your spouse dies before your retirement date, the election is cancelled. You can make another election no later than your retirement date or thirty days after the death of your spouse, whichever is later.
4. You may revoke an election at any time up to your retirement date.
5. You may not revoke an election after your retirement date, regardless of circumstances. If you elect an enhanced survivor pension and your spouse predeceases you, your pension remains at its reduced amount. Your pension amount does not increase.
6. You may only elect an enhanced survivor pension with respect to your spouse at the time of retirement. If you elect an enhanced survivor pension and your spouse at retirement predeceases you, any subsequent eligible spouse would be entitled to 60% of your pension.
To Apply
To apply for a survivors pension, you will need to go to the Forms page and complete a Application for Survivor's Penson - FORM.0023.