Survivor Benefits

If you have a spouse, he or she is automatically your beneficiary and will collect a spousal pension when you die. This entitlement is based on the benefit you earned during your membership in the Plan.

Your spouse, for the purposes of the Plan, is the person of the same or opposite sex to whom you are married or with whom you are living in a common law relationship. You and your spouse must not be living separate and apart at the time of your death.

Your spouse has a few options for the collection of the spousal benefit:

• An immediate pension
  The spousal benefit is paid as a monthly pension directly to your spouse's bank account via direct deposit. The spousal pension is based on the actuarial equivalent value of the pension you earned during your membership in the Plan. Your spouse will begin collecting the benefit on the first day of the month following your death and will receive it for his or her lifetime. Spousal pensions are subject to any increases which may be granted each year due to inflation protection.

• A deferred pension payable when your spouse turns 65
  Rather than an immediate pension, your spouse may opt to collect a pension starting at age 65. The deferred spousal pension is calculated the same way as the immediate pension. Payments begin when your spouse turns 65 and continue until your spouse's death. This deferred pension is also subject to increases each year due to inflation protection.

In the event that your spouse dies before starting the deferred spousal pension, the beneficiary of your spouse will receive the commuted value of the spousal pension in one payment. (The commuted value is an actuarial calculation of what your future pension is worth today in a lump sum). If your spouse does not stipulate a beneficiary, any entitlement will go to his or her estate.

• Immediate lump sum payment
  Your spouse may choose to receive a lump sum payment rather than collecting a pension. This benefit is the commuted value of the benefit you earned during your membership in the Plan. (The commuted value is an actuarial calculation of what your future pension is worth today in a lump sum). It can be taken as a cash payout that is taxable to your spouse. Your spouse may choose instead to take the amount as a transfer into another eligible pension plan (if that plan allows) or into his or her RRSP or another retirement arrangement. Such transfers are tax exempt, subject to the approval of the Canada Revenue Agency and tax limits.

Excess contributions

If, when you die, you are entitled to receive excess contributions, they will be paid to your spouse or beneficiary in a lump sum. Excess contributions are refunded when the total amount of the contributions you made during your membership (plus interest) exceeds 50% of the commuted value of your benefit.

Your spouse dies while collecting a pension

Your spouse's pension will continue until his or her death, at which point it will stop. There is, however, a possibility that your spouse's beneficiary will be eligible to receive survivor benefits upon your spouse's death. If your spouse dies before 60 months worth of pension payments have been made, a payment of the difference between that amount and the amount your spouse received will be made to your spouse's beneficiary or estate.

If you do not have a spouse, your eligible child will receive a children's pension upon your death. This benefit is equal to 50% of the pension you earned during your Plan membership, up until your death.

To be eligible, your son or daughter must be your biological or adopted child who is under the age of 18 and dependent on you for support. If you have two or more eligible children, they will share the benefit until they turn 18. When a child turns 18, he or she is no longer eligible, and the balance of the benefit is redivided among any remaining eligible children.

A guardian – the person who is legally responsible for the care of the children – will collect the benefit on their behalf. The guardian can be an individual stipulated in your will or assigned by the courts upon your death.

In addition to the children's pension, your beneficiary (or your estate if you have not named a beneficiary) may receive a lump sum payment. This payment is equal to the commuted value of the pension you accumulated up to your death, minus the commuted value of the benefit the children are entitled to receive.

Excess contributions

If, when you die, you are entitled to receive excess contributions, they will be paid to your spouse or beneficiary in a lump sum. Excess contributions are refunded when the total amount of the contributions you made during your membership (plus interest) exceeds 50% of the commuted value of your benefit.

Your beneficiary is the person (or persons) chosen by you to receive benefits upon your death. By naming a beneficiary, a benefit will go to the person of your choice, rather than to your estate.

A beneficiary can be anyone you choose - a child or other relative, a family friend or associate. If you name more than one beneficiary, the benefit will be split among them in the manner dictated by you.

Your beneficiary (or if there is no beneficiary, your estate) is eligible to receive a lump sum payment upon your death. This payment is equal to the commuted value of the pension that you accumulated during your Plan membership.

Excess contributions

If, when you die, you are entitled to receive excess contributions, they will be paid to your spouse or beneficiary in a lump sum. Excess contributions are refunded when the total amount of the contributions you made during your membership (plus interest) exceeds 50% of the commuted value of your benefit.

If you don’t have a spouse when you die, your children under age 18 will be eligible for a children’s pension, divided evenly between them and redivided as each one turns 18. In addition, your beneficiaries receive a payment of whatever is left of the lump sum value of your benefit, minus the total value of the children’s pension. The children’s pension is the second priority for all benefits under the Plan.

If you have neither a spouse nor children under age 18 when you die, then the entire commuted value of your benefit is paid to your beneficiary. We call this a survivor benefit.

If your spouse is your beneficiary, and you and your spouse die at the same time, or your spouse dies before you, and you have no eligible children, your benefit will be paid to your estate, which might not reflect your wishes and could complicate the settling of your estate.

By naming a beneficiary distinct from your spouse, you ensure that no matter the circumstances, a benefit will go to the person or persons of your choice.

The choice is yours. Some members name their favourite charities as their beneficiaries, some choose their children if they are over age 18. As part of your overall estate planning, you can think about who (besides your spouse) you would like to have any survivor benefit if you die before you retire.

We recommend against using your will to name your CAAT Pension Plan beneficiaries. It could cause unforeseen complications in the execution of your estate. Completing the Plan’s Change of Information or Beneficiary form ensures a seamless payment of death benefits to the person or people of your choice if the time comes.

Note: Every new beneficiary designation replaces any old ones we have on file, so if you want to add a new beneficiary and share the benefit with them, you have to name all the previous beneficiaries as well. 

Andrew wants to make sure his beneficiary designation is correct to make sure his wishes are carried out when he dies. But he has questions. Isn’t his spouse also his beneficiary? How does he know she’ll get a spousal benefit if anything happens to him? Does he have to list his kids as beneficiaries so they can collect a children’s pension? And what, if anything, can he do to provide for his oldest child who is 18?

Andrew’s spouse is accurately recorded in the “Spouse” category on his annual statement. He doesn’t have to do anything else to ensure that she receives a spousal pension if he dies before she does.

If Andrew and his spouse die at the same time, their 2 children under age 18 will be eligible to receive a monthly children’s pension, which will be divided between them. (At the time of death, the Plan determines the identity, ages and number of eligible children for the purposes of the children’s pension.) The person Andrew designated as his beneficiary will receive an additional payment in a lump sum. This payment is made up of any residual from the lump sum value of Andrew’s benefit, minus the total value of the payments made to the children under age 18.

It might be helpful for Andrew to think of his spouse and kids in a different category from his beneficiaries:

• The spousal pension ensures his spouse receives benefits.
• The children’s pension ensures that if there is no spouse, his kids under age 18 receive a benefit.
• The beneficiary designation ensures that any residual survivor benefits in the event there are no eligible family members, are paid according to his wishes.

When he makes his beneficiary designation, Andrew should think about who would benefit from receiving any survivor benefits from the Plan, and how that beneficiary designation fits into his overall estate plan. He might choose to name any or all of his children as beneficiary, which would ensure that any residual from the children’s pension is also paid to the children. It would also give him a chance to provide a benefit for his children after they turn 18.

Andrew could also name anyone else he chooses to receive a survivor benefit, confident that his spouse and children under 18 are already covered by the Plan’s death benefit provisions. He can keep his kids as named beneficiaries so as they reach 18 they retain some benefit entitlement.

In most cases, your written declaration will be adequate proof of marital status, however you may be asked for a birth certificate or marriage certificate to help ensure that correct information is recorded.

If your spouse wishes to revoke his or her rights to the spousal pension, the request must come directly from your spouse. It is in your spouse's best interest to receive independent legal and financial advice before making this decision.

It will be important for your survivors to have access to the following documents in order to speed along the process:

• Proof of age of the spouse
• Death Certificate

In the case of a children’s benefit, the guardian will have to provide proof of age of each children, as well as written confirmation that there is no spouse.

In the case of a lump sum payment to a beneficiary, the beneficiary will have to provide proof of his or her own age, and written confirmation that there are no spouse or children.

After your death as a pensioner, your spouse is automatically entitled to a survivor pension of 60% of your lifetime pension. If you have an eligible spouse when your pension starts, you can choose to reduce your pension permanently in exchange for an increase in the survivor pension to 75% of your lifetime pension. You must make this choice before the first monthly payment of your pension, and it cannot be changed once it is made.

When your spouse dies, your eligible child (if you have one) will receive a children's pension equal to the spousal pension. If you have no eligible children (those who are under age 18), any balance of 60 months of your lifetime pension that exceeds the total pension payments made will be paid to the beneficiary, if your spouse designated one, or to your spouse's estate.

Your eligible children will receive the same amount as a spouse would have received (divided into equal shares). The child’s pension stops when the child turns 18 - and when that happens, the pension will be redivided among any remaining children.

When your youngest eligible child reaches age 18, he or she (or if he or she died before reaching age 18, the estate) will receive any balance of 60 months of your lifetime pension that exceeds the total pension payments made.

Your beneficiary, if you designated one, or otherwise your estate, will receive any balance of 60 months of your lifetime pension that exceeds the total pension payments made.

 60 months minimum pension guarantee 

The 60 months minimum pension guarantee is an addition to the Plan’s other survivor benefit provisions. The guarantee is that if, after all survivor pensions have been paid, the total amount paid is less than 60 times your initial lifetime pension payment, then any remaining balance will be paid out. It can go to the beneficiary, if one has been designated, or the estate of the last pension recipient, or to the last child to turn 18 if you have eligible children. The initial pension payment does not include any bridge benefit.

The 60 months pension guarantee is simply a guarantee that the pension payments paid to you and your survivors will total at least 60 times the amount of your first pension payment.