At retirement, you selected a pension option. Your chosen pension option determines the amount of your monthly pension.
Each pension option provides a different death benefit. The greater the death benefit, the smaller your monthly pension.
The monthly pension, with its associated survivor benefits (Single Life, with a Five-Year Guarantee), is often referred to as the “normal form” of pension. The normal form of pension is payable monthly for as long as you live, but also includes a guarantee that if you die before you have received 60 monthly payments (five years of payments), the remainder of the 60 payments will be paid to your beneficiary or estate.
Seven Pension Options
Factors are applied to the normal form of pension to determine the pension amounts for the other pension options. Although the monthly pension amounts for the other pension options are different, they have the same value as the pension payable in the normal form.
When you retired, you selected one of seven options, depending on which one best suited your needs, based on factors such as your age, health, family and financial situation. The options are described below.
Single Life Pensions
Single Life pensions are payable for your lifetime or to the end of the guarantee period, whichever is longer. The guarantee period starts from the effective date of the pension.
If you die before the end of the guarantee period chosen, the pension will continue in the same amount to your named beneficiary(ies) or estate until the end of the guarantee period. You may change beneficiaries at any time until the end of the guarantee period. No one else may change your beneficiary, even after your death.
The types of Single Life pensions are the following:
Single Life, No Guarantee (payments stop on your death regardless of the number of payments made)
Single Life, 5-Year Guarantee
Single Life, 10-Year Guarantee
Single Life, 15-Year Guarantee
Joint and Survivor Pensions
Joint and Survivor pensions are calculated on the basis of two lifetimes – yours and a nominee’s. The nominee cannot be changed after the pension has started. If the nominee is your spouse/pension partner, a pension is paid for your lifetime and your spouse/pension partner's lifetime. If the nominee is a dependant under the tax rules, a pension is paid for your lifetime and, after your death, only for as long as the nominee remains a dependant.
All Joint and Survivor pensions have a five-year guarantee period. If both you and your nominee die before receiving 60 monthly payments, the remainder of the 60 payments will be paid to your beneficiary or estate.
This is how the three Joint and Survivor pensions work:
Joint Equal: If your nominee dies first, the pension payments stay the same and continue to you for your lifetime. If you die first, the payments stay the same and continue to your nominee.
Joint Reducible by One-Third: If your nominee dies first, the pension payments reduce by one-third so that two-thirds of the pension continues to you for your lifetime. If you die first, two-thirds of the pension continues to your nominee.
Joint 100/60: If your nominee dies first, the pension payments stay the same and continue to you for your lifetime. If you die first, 60% of the pension continues to your nominee.