If you die before you retire, and you earned at least some pension in at least two Plan Years, the Plan will pay a death benefit.
- How much is you death benefit?
- If you do not have a spouse…
- If you have a spouse…
- The amount of the death benefit will be no less…
- You may name anyone, including your estate, as your beneficiary…
It will be the greater of:
- 60% of the commuted value of the pension you had earned up to the date of your death, or
- your total self-payments (if any) accumulated with interest to the date of your death.
The way the death benefit is paid depends on whether you have a spouse at the time of your death.
…your named beneficiary or estate may receive the death benefit as a lump sum cash payment, subject to withholding tax.
…your spouse may choose either a lifetime pension that can be provided by the lump sum value of the death benefit; or a lump sum payment of the death benefit as follows:
Benefit for Pre-1993 Period of Membership
Your spouse may receive the portion of the death benefit that relates to the pension you earned before 1993 in one of the following forms:
- a transfer of the lump sum value of the death benefit out of the Plan to a regular RRSP; or
- a cash refund, subject to withholding tax.
Benefit for Post-1992 Period of Membership
The portion of the death benefit that relates to your pension earned after 1992 may be received as a transfer of the lump sum death benefit out of the Plan on a locked-in basis to one of the following vehicles
- another registered pension plan (if that plan allows it),
- a locked-in RRSP, or
- an insurance company or other savings institution, to purchase an immediate or deferred pension that is not commutable.
If the amount of the pension is small enough, your spouse may transfer the commuted value to a regular RRSP or receive the payment in cash, subject to withholding tax.
If your spouse dies before choosing the form of payment, the death benefit will become payable to your spouseâ€™s beneficiary. If there is no beneficiary, it will be paid to your spouseâ€™s estate.
…than the minimum death benefit required by law.
But under the law, if you have a spouse, any benefits payable when you die are paid to your spouse, whether you have designated your spouse as beneficiary or not.
The only exception is if your spouse signs a waiver form provided by the Plan office.
To appoint or change a beneficiary, obtain the appropriate form from the Plan office.
If you do not have a spouse, you have not appointed a beneficiary, or your beneficiary dies before you, any benefits will be paid to your estate.
We canâ€™t pay directly to a child beneficiary. Contact the plan office for information on naming an adult trustee, multiple beneficiaries or contingent beneficiaries.