Survivor benefits

The Plan can help you protect your loved ones after you're gone.

 

PLAN FEATURES

A lifetime pension for your spouse

In addition to paying lifetime pensions, the CAAT Pension Plan provides various survivor benefits upon your death.

If you die after you retire

Your pension includes a lifetime pension for your surviving eligible spouse, equal to 60% of the lifetime pension you were receiving at the date of your death. Conditional inflation protection increases, when granted, continue to be applied to lifetime pension paid to your surviving spouse.

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% or 100% 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.

Children’s pension

If you do not have an eligible spouse, but you do have an eligible child at the time of your death, a children’s pension will be paid to them. See Other survivor benefits if you die with no spouse to learn more.

180-Month Minimum Payment Guarantee

A designated beneficiary may receive a payment after your death or your spouse’s. The guarantee is that if, after all pensions have been paid, the total amount paid is less than 180 times your initial monthly lifetime pension payment, then any remaining balance will be paid out. It can go to the designated beneficiary or, if there isn’t one, to the estate of the last pension recipient (you or your spouse).

The minimum payment guarantee is simply a guarantee that the pension payments paid to you and your survivors will total at least 180 times the amount of your first monthly lifetime pension payment.

If you had a spouse when your pension started, they will be your eligible spouse provided:

  • You and your spouse were, at the time your pension started, married or in a common-law relationship and not living separate and apart as defined by applicable legislation in your jurisdiction of employment, and,
  • You and your eligible spouse did not waive the survivor pension benefit at the time of your retirement, or after you started your pension as part of a separation. In order to be effective, the waiver must be done in accordance with the conditions set out by applicable legislation in your jurisdiction of employment. Contact the Plan for information on the spousal waiver that applies to your jurisdiction of employment.

If you did not have an eligible spouse when you started your pension, and you subsequently have a spouse at the time of your death, that spouse would be your eligible spouse, provided they meet the definition of spouse under applicable legislation.

If you do not have an eligible spouse, but you do have an eligible child at the time of your death, a children’s pension will be paid to them. See Other survivor benefits if you die with no spouse to learn more.

The definition of ‘spouse’ differs by jurisdiction across Canada. It is important that you understand the definition applicable to you. You can find the applicable definition that applies based on your jurisdiction of employment when you retired here: Pension policies by jurisdiction.

If you die before you retire

If you have an eligible spouse at the time of your death, they are the sole recipient of the pre-retirement death benefit, and no other survivor benefits are paid. The amount of the pre-retirement death benefit is based on the benefit you earned during your membership in the Plan.

If you do not have an eligible spouse, the pre-retirement death benefit will be paid to your designated beneficiaries or estate. If your jurisdiction of employment is Ontario or Nova Scotia, a benefit will be paid to your eligible children, if any.

Your eligible spouse has a few options for the collection of the pre-retirement death benefit.

Options for the pre-retirement death benefit

The pre-retirement death benefit is paid as a monthly pension directly to your eligible spouse's bank account via direct deposit. This pension is based on the actuarial equivalent value of the pension you earned during your membership in the Plan. Your spouse will begin collecting their pension effective the first day of the month following your death, and will receive it for the rest of their life. The immediate monthly pension is subject to any increases which may be granted each year due to inflation protection.

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

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

Your eligible 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 eligible 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.

If your jurisdiction of employment is Quebec, other payment options may be available to your surviving spouse. Contact the Plan for details.

Your spouse's pension will continue until their death, at which point it will stop. There is, however, a possibility that your spouse's designated beneficiary will be eligible to receive a benefit upon your spouse's death. If your spouse dies and at that time the total of all pension payments paid to you and your spouse is less than 180 times your initial monthly lifetime pension payment, then any remaining balance will be paid to your spouse's beneficiary or estate.

For more details on how the pre-retirement death benefit is paid out, refer to the following examples and choose the situation that applies to you:

If your jurisdiction of employment is Ontario or Nova Scotia and you do not have an eligible spouse, your eligible child or children will receive a children's pension upon your death. This benefit is equal to 50% of the pension you earned during your Plan membership. The pre-retirement death benefit paid to your designated beneficiaries or estate will be correspondingly reduced.

To be eligible for the children’s pension, your biological or adopted child must be dependent on you and either
a) under the age of 18, or
b) under the age of 25 and a full-time student, or
c) unable to support themselves due to a disability (and either became disabled before the age of 18 or before the age of 25 if they were a full-time student).

If you have two or more eligible children, they will share the children’s pension. Once one child no longer meets the definition, the balance of the children’s pension is re-divided equally among any remaining eligible children. In addition to the children's pension, your designated beneficiaries (or your estate if you have not named any designated beneficiaries) 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 pension the eligible children are entitled to receive. The pre-retirement children's pension only applies to members whose jurisdiction of employment is Ontario or Nova Scotia. It does not apply in any other jurisdictions.

Your designated beneficiaries are the person (or persons) chosen by you to receive pre-retirement death benefits upon your death. By naming designated beneficiaries, a benefit will go to the person of your choice, rather than to your estate.

Your designated beneficiaries can be anyone you choose - a child or other relative, a family friend or associate. If you name more than one designated beneficiary, the benefit will be split among them in the manner dictated by you. (Please note that if you name more than one designated beneficiary, the percent share given to each must total 100%.)

Your designated beneficiaries (or if there are no designated beneficiaries, your estate) are eligible to receive a lump sum payment if you die before retiring. This payment is equal to the commuted value of the pension that you accumulated during your Plan membership.

If, when you die, you are entitled to receive excess contributions, they will be paid to the pre-retirement death benefit recipient (your eligible spouse or designated beneficiaries). 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.

Depending on your jurisdiction of employment, there may be different payout options for the excess contributions.

A change in marital status may have an effect on pre-retirement death benefit payouts. If you marry, separate or divorce, it is important to notify the Plan as soon as possible.

If you separate or divorce, the pension you earn may need to be included in the valuation and/or division of family property. Visit the Separation or Divorce page for more information.

Spousal Waiver

The CAAT Pension Plan considers your spouse to be the eligible spouse for the pre-retirement death benefit if they meet the definition of spouse in your jurisdiction of employment, and your spouse has not waived the pre-retirement death benefit in accordance with the conditions set out by applicable legislation.

If your spouse wishes to waive their rights to the pre-retirement survivor pension, the request must come directly from your spouse in accordance with the conditions set out by applicable legislation. Contact the Plan for the spousal waiver that applies to your jurisdiction of employment It is in the best interest of you and your spouse to receive independent legal and financial advice before making this decision.

Your spouse is defined as the person to whom you are married or that you are in a common-law relationship with, as defined by applicable legislation in your jurisdiction of employment. The definition of ‘spouse’ differs by jurisdiction across Canada. It is important that you understand the definition applicable to you.You can find the definition that applies based on your jurisdiction of employment here: Pension policies by jurisdiction.

The CAAT Pension Plan considers your spouse to be the eligible spouse for the pre-retirement death benefit if, on the date of your death:

  • Your spouse meets the definition based on your jurisdiction of employment and is not living ‘separate and apart’ based on the applicable definition, and
  • Your spouse has not waived pre-retirement death benefits. In order to be effective, the waiver must be done in accordance with conditions set out by applicable legislation. Contact the Plan for the spousal waiver that applies to your jurisdiction of employment.

Collecting a pre-retirement survivor benefit

In the event of your death, we will assist your eligible spouse, or if you don’t have an eligible spouse, your eligible children or designated beneficiaries by outlining their options and providing all the necessary paperwork.

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 eligible spouse
  • Death Certificate

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

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

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