It's Your Pension

If you die before retirement and at the time of your death you have an eligible spouse, your spouse automatically receives the survivor benefits unless they have waived their rights. Your spouse may waive their entitlement to a survivor benefit by completing the applicable waiver, Form 4 - Waiver of Pre-Retirement Death Benefit, available on the FSRA website.

If you do not have an eligible spouse that is entitled to a survivor benefit or your surviving spouse dies while they are entitled to a survivor pension, your eligible children are next in line for a survivor benefit. You may also designate beneficiaries to receive survivor benefits, in case you do not have an eligible spouse or eligible children who are entitled to survivor benefits when you die. You can update your beneficiaries using your Online Services account or by completing a Member Spousal Information and Beneficiary Designation (OPTrust 1015) form.

Eligibility for survivor benefits will be determined at the time of your death.

Survivor benefits

The following chart explains, under the current plan terms, who is eligible to receive the survivor benefit if you die before retirement and what the benefit is:

* For these pensions, the commuted value is converted to an immediate or deferred pension based on the surviving spouse’s election.

** Lump sum option only available if surviving spouse was not receiving a survivor pension.

*** If there is no surviving spouse but there is an eligible child, a portion of the commuted value may be payable to the other beneficiaries if the value of the child's survivor pension is less than the value of the member's pension.

If no eligible survivors or beneficiaries

When a member does not have any eligible survivor(s), that is, there is no eligible spouse, eligible children or other beneficiary designated by the member, any funds that are payable from the Plan will be paid to the member’s estate.

When death occurs

A package is sent to the eligible survivor(s) or the executor of the member’s estate. This personalized package provides details of any survivor benefits.

Notification of death

If you die while employed, your survivor should contact your employer who will contact OPTrust.

Increased survivor pension

Before you start your pension, you have the option to increase the survivor pension for your spouse from 60% to 65%, 70% or 75%. Your pension will be permanently reduced to pay for the increase and the reduction remains in effect for your lifetime, even if your spouse dies before you.

You can apply for an increased survivor pension at any time before your pension begins. If you want to apply for an increased survivor pension more than two years before you retire, please complete an Application for Increased Survivor Pension (OPTrust 1006) form and submit it to OPTrust. If you apply within two years of starting your pension, when you retire you must be able to certify that you are in good health for your age. You may withdraw your application at any time before you retire but your decision cannot be changed after your pension begins.

Below is an example showing the monthly pension that would be paid to a surviving spouse based on a 60%, 65%, 70% and 75% survivor pension. It also shows the reduction to the member’s pension when more than a 60% survivor pension is provided. The reduction your pension may vary depending on your age and the age of your spouse at the time you retire.

Example

Member’s age at termination: 65 Spouse’s age: 62 Same spouse at termination and when pension started? YES.

Usually survivor benefits are automatically payable to your eligible spouse. But, you may not have a surviving eligible spouse. If you die after you have started receiving a pension and you do not have an eligible spouse or eligible children, no further pension amounts will be paid from the OPSEU Pension Plan.

Survivor benefits

If you die after retirement, the benefits normally flow as follows:

If you die after you have started receiving an OPTrust pension, under the current terms of the Plan, your eligible spouse or eligible child (for as long as the child is eligible) will receive a survivor pension based on 60%* of the pension you were receiving when you died. If you die before age 65, you would be receiving a CPP bridge pension in addition to your retirement pension. The CPP bridge ends on the date you would have turned 65. On that date, your survivor’s pension is adjusted to 60%* of what you (the member) would have received upon turning 65.

Note:

* A survivor pension of 65%, 70%, or 75% may be payable to your eligible spouse if you elected an increased survivor pension.

** If you elect an increased survivor pension for your spouse, your eligible children will continue to receive the survivor pension to a maximum of 66 2/3% of your pension, as permitted under the Income Tax Act.

Pension used to calculate survivor benefits

The following example shows how a survivor pension changes if the member dies before age 65. At age 65, the member’s CPP bridge pension would have ended. Therefore, the survivor’s pension is reduced to 60% of the member’s pension (without the CPP bridge).

Example

Remarriage or surviving spouse

If your surviving spouse remarries after your death, they will continue to receive a survivor pension for their lifetime. However, if your surviving spouse remarries, their new spouse is not eligible for survivor pension benefits.

Residual balance

Upon your death or the death of your survivors, whichever occurs later, a residual balance may be payable if the total of your contributions plus interest at your retirement date exceeds the total payments paid to you and your survivors. This residual balance is payable as a lump sum cash payment, less withholding tax, to your designated beneficiary(s), or to your estate if you do not have a beneficiary. After receiving your pension for a few years, the residual balance is usually exhausted.

a – b = c

a: your contributions to the Plan, plus interest

minus

b: the sum of all payments made to you + your survivors

equals

c: residual balance*

* The employer’s contributions are not included in this calculation.

If no eligible survivors

When a retiree does not have any eligible survivors, that is, there is no eligible spouse, eligible children or other beneficiaries, any residual balance payable from the Plan will be paid to the estate of the retiree.

OPTrust sends an entitlement package to the executor of the estate when there is no survivor or beneficiary. This personalized information provides details of any benefits payable.

Notification of death

If you die after your pension has started, your survivor or the executor of your estate should notify OPTrust immediately.