Q&A: Your spouse and your beneficiary

Posted for Retired Members, March 27, 2017

The ability to leave something for your loved ones when you’re gone is important to most retired members. In this Newsletter, we answer your top questions about survivor pensions after retirement, an often misunderstood provision of the Plan.

Q. How can I be sure my spouse will receive a pension when I die?
A. If you are a retired member, the person shown on page 4 of your Retired Member Annual Statement is the individual listed in our files as your spouse. However, he or she must meet the Plan’s eligibility criteria in order to claim a survivor pension after your death. Specifically, your eligible spouse is the person you were legally married to, or in a common-law relationship with, on your retirement date, providing you and your spouse were not living separate and apart, and provided your spouse has not properly waived the survivor pension.

Q. My spouse is in a nursing home; does this mean they are not entitled to a pension?
A. Living “separate and apart” refers to separate living arrangements where the intention is to end the marriage or common-law relationship. It does not include a situation in which one spouse is in long-term care, or living away for some other reason.

Q. I’m married – what will I leave for my eligible spouse?
A. Upon your death, your eligible spouse is entitled to a monthly survivor pension equal to 60% of your lifetime pension (or 75% if you selected that option at retirement). This survivor pension is paid for the rest of your spouse’s life, and will receive the same percentage of inflation protection increases that your pension would receive.

Q. I was married when I retired, but now I’m divorced. Will my ex-spouse receive a pension?
A. If you were married when you retired, that spouse is the eligible spouse for the purposes of the survivor pension, even if you have since separated or divorced, and even if you have since remarried. Your ex-spouse would have to properly waive the survivor pension (e.g. as part of a separation agreement) by completing the appropriate forms from the Financial Services Commission of Ontario (FSCO).

Q. I’m getting married (or remarried). Will my new spouse receive a pension?
A. If you marry or enter a common-law relationship after you retire, your new spouse may become your eligible spouse for the survivor pension under certain conditions:

  • You were not married when you retired; or
  • You were married when you retired, but your spouse pre-deceased you; or
  • You were married when you retired, but your spouse properly waived the survivor pension (e.g. as part of a separation agreement.)

If eligible, your new spouse would be entitled to a monthly survivor pension equal to 60% of your lifetime pension.

Q. Can I leave anything for my children?
A. If you don’t have an eligible spouse at retirement, your eligible children will receive a children’s pension, paid to their legal guardian on your behalf. To be eligible, your children have to be under the age of 18 at your time of death. The children’s pension is equally divided among your eligible children, and, as each child turns 18, their payment stops and is re-divided among the remaining eligible children.

If you have children who are over the age of 18 at the time of your death, the children’s pension does not apply. Your adult children will only receive a payment if they are listed as your designated beneficiary (on page 4 of your Retired Member Annual Statement) and then, only under the condition of the 60-month guarantee. See below for details.

Q. What if I have no eligible spouse?
A. If you do not have an eligible spouse and you do not have any eligible children on the date of your death, your designated beneficiary, named on page 4 of your Retired Member Annual Statement, may be entitled to a one-time payment under the Plan’s 60-month pension guarantee. See below for details.

Q. What will my beneficiary, listed on page 4 of my Retired Member Annual Statement, receive upon my death?
A. Only your eligible spouse or eligible children are entitled to monthly pensions upon your death. Your designated beneficiary would only be entitled to a one-time lump sum payment under the conditions of the 60-month guarantee. See below for details.

Q. I’m collecting a survivor pension and have remarried. Will my new spouse receive a survivor pension upon my death?
A. No. The survivor pension is only available to the spouse of a retired member of the CAAT Pension Plan. However, your designated beneficiary may receive a one-time lump sum payment under the conditions of the 60-month guarantee shown below.

The 60-month guarantee

The 60-month guarantee specifies that if, when you die, you do not have an eligible spouse or eligible children, and all payments received in respect of your entitlement do not equal 60 times your initial monthly lifetime pension payment, your designated beneficiary will receive the difference.

This means that by the time you have been collecting a pension from the Plan for over 60 months, your beneficiaries are no longer entitled to a payment.