When thinking about survivor benefits for your loved ones, it is important to know who is eligible and what survivor benefits are payable.
In the event of your death, your surviving spouse, eligible children, or dependants may be automatically entitled to receive a survivor pension. These survivors are defined as follows:
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.
- 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.
- 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.
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.
The following outlines what survivor benefits* are paid in the event of your death:
1. Your surviving spouse will receive a monthly lifetime spousal survivor pension equal to:
If death occurs prior to retirement:
- 60% of your accrued pension as an immediate pension. Any post-1991 bridge benefit earned at date of death is removed from the survivor pension.
If death occurs after retirement:
- The survivor option elected at retirement or was applicable at the time of retirement (see Survivor Benefit Options at Retirement section below).
2. Your eligible children will each receive a monthly child survivor pension (until they no longer qualify) equal to:
- 10% of your accrued pension, to a maximum total of 40% shared equally among all children in the event there are more than 4 eligible children.
If there is no surviving spouse, your eligible children will share the spousal survivor pension in (1.) above as well as receive the child survivor pension.
3. If you do not have a surviving spouse or eligible children but have a dependant, the dependant will receive a monthly lifetime dependant survivor pension equal to:
- The spousal survivor pension in (1.) above
4. If you do not have a surviving spouse, eligible children, or dependants, your Beneficiary or Estate if you have not named a beneficiary, will receive a one-time lump sum payment equal to:
If death occurs prior to retirement:
- Your contributions with interest
If death occurs after retirement
- The difference between the total survivor pensions paid and your contributions with interest OR
- If you elected a guarantee period at retirement and die before the end of the selected guarantee period, the value of the pension payments remaining in the guarantee period
* Survivor Benefits are subject to limits in accordance with the Income Tax Act (Canada)
Survivor Pension Options at Retirement
When you retire, you will have the option to choose to accept a slight reduction in your pension in return for a guarantee and/or enhanced survivor’s pension.
You may choose one or both* of the following:
A. A survivor pension as a percentage of your pension:
- The percentage options are: 60%, 80%, or 100%
Note: The higher the percentage, the greater the reduction to your pension
B. A guarantee period that your pension will be paid for:
- The guarantee period options are: 0, 5, 10, or 15 years
Note: The longer the guarantee period, the greater the reduction to your pension.
* If you do not have a spouse at retirement, you can only choose an option from B above.
Important information on 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.
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 for a survivors pension, you will need to complete a Application for Survivor's Penson - FORM.0023.