At retirement, you will select a pension option, which determines the amount of your monthly pension.
Choosing Your Pension Option
Each pension option provides a different survivor benefit. The greater the benefit, the smaller your monthly pension.
There are Seven Pension Options:
- Four Single Life Options
- Three Joint and Survivor Options
If you have a spouse/pension partner at retirement, you must choose a Joint and Survivor pension and name your spouse/pension partner as your nominee.
If your spouse/pension partner waives their right to a Joint and Survivor pension (by completing the statutory declaration included in your Pension Options Package), you can:
- choose a Single Life Pension Option, or
- name a dependant as your nominee in accordance with the Income Tax Act and choose a Joint and Survivor pension.
Which Option is Best for You?
Your pension option choice should reflect your personal situation. Think about the level of protection you want for your spouse/pension partner, or consider the length of time that you want your pension guaranteed for your beneficiary. Other things to consider are your:
- age and your spouse/pension partner’s age,
- family and financial situation,
- income needs and future lifestyle plans in retirement,
- other sources of income, and
- dependants (if applicable).
Remember, you can always speak to an ATRF pension counselor if you have any questions.
The Normal Form
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.
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 (unless a Family Property Order is filed with ATRF that prevents you from making a change). No one else may change your beneficiary, even after your death.
Single Life Pension Options:
- Single Life, No Guarantee
Payments stop on your death regardless of the number of payments made.
- Single Life, 5-Year Guarantee
Payable for your lifetime or to the end of the 5-year guarantee period, whichever is longer.
- Single Life, 10-Year Guarantee
Payable for your lifetime or to the end of the 10-year guarantee period, whichever is longer.
- Single Life, 15-Year Guarantee
Payable for your lifetime or to the end of the 15-year guarantee period, whichever is longer.
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.
Please note: Once a nominee is chosen, it cannot be changed even if there is a death, separation, or divorce.
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.
Advance & Reduction Option
The Advance & Reduction Option is a way to level your ATRF pension income with your Canada Pension Plan (CPP) benefits. You will receive more pension from the plan before age 65 and less pension after age 65. This option is only available to members who retire prior to age 64. More information on this topic can be found on the Advance & Reduction page.