NORMAL FORM – MEMBER WITH ELIGIBLE SPOUSE
If you have an eligible spouse at your retirement date, and on your subsequent death your eligible spouse is still living, he or she will receive a monthly pension of half the regular pension (not including the Supplementary Bridge Benefit) you were receiving for as long as he or she lives.
For example, assuming:
You retired at age 65 when your spouse was aged 62. Your pension was $3,000 per month.
Upon your death your spouse, if still alive would receive a monthly surviving spouse pension of $1,500 for the rest of his or her lifetime.
If your spouse is more than 10 years younger than you, the pension payable to your spouse upon your death will be reduced in an actuarially equivalent manner to recognize the longer life expectancy.
Pension Legislation requires that if you have an eligible spouse when you retire, you must choose an Optional Form of Pension (see below for explanation of the optional forms of pension that are available) that results in a pension that continues to your eligible spouse at a level that is not less than 60% of your pension on your death. This requirement can be waived if both you and your spouse sign a prescribed waiver form. You will also be required to complete a declaration of marital status form.
A pension that continues at 60% of your pension to your spouse on your death, will result in roughly a 3% reduction in your pension. Therefore, in the above example, your pension would be reduced to approximately $2,910 per month and your spouse would receive $1,746 on your death, for the rest of his or her lifetime.
WHO IS AN ELIGIBLE SPOUSE?
An eligible spouse is a person (a) to whom you are legally married and who is not living separate and apart from you, or (b) to whom you are not married but who is living with you in a conjugal relationship which (i) has continued for a period of not less than 3 years or (ii) is of some permanence where the two of you are the natural or adoptive parents of a child.
The determination of an eligible spouse is done at the date of your retirement. You can have only one eligible spouse. If more than one person satisfies the definition, then the one who last satisfied it must be named on your declaration of Marital Status when you retire, and spousal benefits will be paid to that person.
NORMAL FORM – MEMBER WITHOUT ELIGIBLE SPOUSE
If you do not have an eligible spouse at retirement, then your pension will be payable for a minimum of 10 years guaranteed. If you die during the first 10 years after retirement, the pension will continue to be paid to your beneficiary for the remainder of the 10 years.
If you die before the end of the guarantee period, a lump sum payment equal to the present value of the remaining guaranteed payments, will be made in the event you have not designated a beneficiary or if the beneficiary is listed as your estate.
If you die after the guaranteed period has expired, payments will cease upon your death.
ARE THERE OPTIONAL FORMS OF PENSION?
Yes. If you wish, and with the consent of the Trustees, you may elect a different form of pension provided you notify the Benefits Office in writing before your retirement.
Under one such form, the amount of pension you receive is a reduced for life but if you die before your spouse, he or she will receive either the same or a lesser amount for his or her lifetime. You can elect to have your spouse receive 100%, 75%, 66 2/3% or 60% of your pension. Or you can choose a variation on this option such that your reduced pension reverts back to the original unreduced amount in the event that your spouse predeceases you. However, this will result in a further reduction in your lifetime pension, and should you die before your spouse, your spouse would receive the chosen percentage of this further reduced pension. The amount of the resultant pension will depend on the amount of normal pension you have earned, your age and your spouse’s age, at your retirement. In most circumstances, election of one of the alternate forms of pension will result in a reduced pension.
Another form is where the pension is payable for your lifetime but with a minimum 15 years of payments guaranteed. If you die within 15 years of your retirement, the pension will be continued to your beneficiary for the remainder of the 15 years.If you die after the guaranteed period has expired, payments will cease upon your death. Note: if you have an eligible spouse at retirement, then you and your spouse must sign a prescribed waiver form, as this optional form does not result in a spousal pension of at least 60%.