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Survivor benefits

The CAAT Pension Plan, in addition to paying pensions to members once they retire, provides various survivor benefits upon your death. Knowing in advance what to expect from the Plan can help you protect your loved ones.

Prior to retirement, all Plan members are entitled to some form of survivor benefit. The following outlines the applicable survivor benefits if you were to die before retirement and your province of employment is Ontario.

If you die before you retire 

If you have an eligible spouse on the date of your death, they are the sole recipient of the pre-retirement death benefit, and no other survivor benefits are paid. You may also name a designated beneficiary or beneficiaries for your pre-retirement death benefit; however, they can only receive the pre-retirement death benefit if you do not have an eligible spouse on the date of your death.

You should name as your designated beneficiaries the person or persons you would like to receive the pre-retirement death benefits in the event that you do not have an eligible spouse on the date of your death. If you do not have an eligible spouse on the date of your death and have not named any designated beneficiaries, the pre-retirement death benefit will be paid to your estate. Nevertheless, if you do not have an eligible spouse, but have eligible children on the date of your death (dependent children, under age 18), they receive a children’s pension, and the pre-retirement death benefit paid to your designated beneficiaries or estate will be correspondingly reduced.

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:

You have an eligible spouse (with or without eligible children)

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

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

  • An immediate pension
    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 effective the first day of the month following your death and will receive it for his or her lifetime. The immediate monthly pension is subject to any increases which may be granted each year due to inflation protection.
  • A deferred pension payable when your eligible spouse turns 65
    Rather than an immediate pension, your eligible spouse may opt to collect a pension starting at age 65. The 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.

  • Immediate lump sum payment
    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.
Excess contributions

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) in a lump sum. 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.

If your spouse dies while collecting a pension

Your spouse's pension will continue until his or her death, at which point it will stop. There is, however, a possibility that your spouse's designated beneficiary will be eligible to receive a survivor benefit upon your spouse's death. If your spouse dies before 60 months’ worth of pension payments have been made, a payment of the difference between that amount and the amount your spouse received will be made to your spouse's beneficiary or estate.

You have eligible children but no eligible spouse

If 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, until your death.

To be eligible for the children’s pension, your child must be your biological or adopted child, under the age of 18 and dependent on you for support. If you have two or more eligible children, they will share the children’s pension until they turn 18. When a child turns 18, they are no longer eligible to receive the children’s pension, and the balance of the children’s pension is re-divided among any remaining eligible children. A legal guardian will collect the benefit on behalf of the 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.

Excess contributions

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) in a lump sum. 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.

You have no eligible children and no eligible spouse

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.

Excess contributions

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) in a lump sum. 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.

Questions and answers

Who is an "eligible spouse"?

For members whose province of employment is Ontario, your spouse is defined as the person to whom you are legally married or in a common-law relationship. Common-law means a couple that has been living together for at least three years (or less if the couple has children).

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

  • You and your spouse are living together at the time of your death (in other words, not living “separate and apart”), and
  • Your spouse has not waived the pre-retirement death benefit.

Who are the "eligible children"?

To be eligible for the children’s pension, your child must be your biological or adopted child, under the age of 18, and dependent on you for support. If you have two or more eligible children, they will share the children’s pension until they turn 18. When a child turns 18, he or she is no longer eligible to receive the children’s pension, and the balance of the children’s pension is re-divided among any remaining eligible children. A legal guardian will collect the benefit on behalf of the eligible children.

What if your marital status changes?

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, be aware that under Ontario law, the value of the pension you earned while married must be included in the calculation of family property. 

What is a spousal waiver? (Applies if your province of employment is Ontario)

If your spouse wishes to waive his or her rights to the pre-retirement survivor pension, the request must come directly from your spouse, using the applicable form (FSCO Form 4 Waiver of Pre-Retirement Death Benefit). It is in your spouse's best interest to receive independent legal and financial advice before making this decision.

To waive a post-retirement survivor benefit, the FSCO form must be submitted within the 12 month period before the pension begins (Form 3 - Waiver of Joint and Survivor Pension).

Please note that there is a different process for waiving the post-retirement survivor benefit once your pension is in pay. At that point, FSCO Family Law Form 8 would apply, and the survivor pension can only be waived in the context of a marriage breakdown.

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. The survivor pension receives inflation protection in the same manner as your lifetime pension did.

If you die after you retire, one of the following three situations will apply to you.

You have an eligible spouse

After your death as a retired member, your eligible spouse receives a survivor pension of 60% of your lifetime pension. 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% 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.

If, when your eligible spouse dies, you have an eligible child (a dependent child, under age 18), that child will receive a children's pension equal to the spousal pension. If you have no eligible children, any balance of 60 months of your lifetime pension that exceeds the total pension payments made will be paid to your spouse’s designated beneficiary, if your spouse designated one, or to your spouse's estate.

Inflation protection increases on the lifetime pension are part of the calculation of the survivor benefit. Since January 1, 1998, retiring members with an eligible spouse have had the option of selecting a 75% spousal pension in exchange for a lower pension for themselves. If the member dies before their spouse, their eligible spouse receives 75% of their lifetime pension at the date of death (this applies to the spouse at the time of retirement).

The spousal pension from the Plan is paid for the rest of the surviving spouse’s life

If your marital status has changed due to separation or divorce, be aware that under Ontario law, the value of the pension you earned while married must be included in the calculation of family property. This, however, is not a requirement for common law relationships. 

Neither an eligible spouse nor eligible children

Your designated beneficiaries, if you have designated any, or otherwise your estate, will receive any balance of 60 months of your lifetime pension that exceeds the total pension payments made.

60 months minimum guarantee

The 60 months minimum pension guarantee is an addition to the Plan’s other survivor benefit provisions. The guarantee is that if, after all survivor pensions have been paid, the total amount paid is less than 60 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. The initial pension payment does not include any bridge benefit.

The 60 months pension guarantee is simply a guarantee that the pension payments paid to you and your survivors will total at least 60 times the amount of your first monthly lifetime pension payment.

No eligible spouse, but eligible children

To be eligible for the children’s pension, your child must be your biological or adopted child, under the age of 18, and dependent on you for support. If you have two or more eligible children, they will share the children’s pension until they turn 18. When a child turns 18, he or she is no longer eligible to receive the children’s pension, and the balance of the children’s pension is re-divided among any remaining eligible children. A legal guardian will collect the benefit on behalf of the eligible children. Your eligible children will receive the same amount as an eligible spouse would have received (divided into equal shares). The child’s pension stops when the child turns 18 - and when that happens, the pension will be re-divided among any remaining eligible children.

When your youngest eligible child reaches age 18, he or she (or if he or she died before reaching age 18, the estate) will receive any balance of 60 months of your lifetime pension that exceeds the total pension payments made.

Questions and answers

Who is an “eligible spouse”?

In Ontario, your spouse is defined as the person to whom you are legally married or in a common-law relationship at retirement. Common-law means a couple that has been living together for at least three years (less if the couple has children).

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

If you did not have an eligible spouse when you retired, and you subsequently have a spouse at the time of your death, that spouse would be your eligible spouse, provided you and your spouse were living together.

What happens if your eligible spouse at retirement pre-deceases you?

If you have a subsequent spouse on your death, that subsequent spouse would be your eligible spouse, provided you and your subsequent spouse were living together.

What happens if you and your eligible spouse at retirement separate or divorce in retirement?

Your eligible spouse at the time of retirement remains the eligible spouse for the survivor benefit unless he or she has properly waived the survivor pension benefit as part of the separation. For Ontario, see FSCO Family Law Form 8 for the required conditions that must be met for a former spouse to waive his/her entitlement to a survivor pension as part of a post-retirement marriage breakdown.

If your eligible spouse at the time of your retirement has waived the survivor pension as described above, and you have a subsequent spouse on your death, that subsequent spouse would be the eligible spouse for the survivor pension, provided you and your subsequent spouse were living together at the time of your death.

If you’ve separated from the spouse you had at retirement or have a new spouse, be sure to contact the Plan as soon as possible, to ensure that the Plan’s records are kept up to date.

 “Living separate and apart” does not include a situation where one spouse is in long-term care, or living away for some other reason. It refers to separate living arrangements where the intention is to end the marriage or common-law relationship.

The importance of having designated beneficiaries

No matter what your marital status, naming a designated beneficiary in the CAAT Pension Plan is important. Having a designated beneficiary will ensure that your pension benefits are paid in accordance with your wishes if you die before you retire (and do not have an eligible spouse).

Do you work outside of Ontario?

Some Plan provisions may be impacted by the pension legislation that is applicable based on your province of employment.

Claiming a survivor benefit

Information to complete a survivor benefit claim with the CAAT Pension Plan
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Questions? Contact Us

The CAAT Plan's member services team are available to answer any questions you may have.