When a member or pensioner dies
How can you plan for benefits for your survivors?
Your spouse's survivor pension is based on your pension at age 65. This means a pension that has been integrated for CPP. If you are receiving an OPTrust pension and die before age 65, your spouse or eligible child receives a survivor pension based on 60% of the pension you were receiving. The survivor pension is recalculated to 60% of your CPPintegrated pension, on what would have been your 65th birthday. If you die after age 65, your pension has already been integrated, so your spouse or eligible child will receive payments based on the amount of pension you were receiving when you died.
Pension used to calculate survivor benefits
The following example shows the reduction to a monthly pension for a pre-age 65 death and the amount of the survivor pension provided after CPP integration (which occurs on the deceased’s 65th birthday).
| Member's age at termination | 58 |
| Member's age at death | 60 |
| Spouse, at termination and when pension started | yes |
| Member's non-CPP integrated pension | $2,027 |
| Member's CPP-integrated pension at age 65 | $1,400 |
| Per cent to surviving spouse | 60% |
| Surviving spouse's pension (until spouse's 65th birthday) | $1,216 |
| Surviving spouse's pension (after spouse's 65th birthday) | $840 |
INCREASED SURVIVOR PENSION FOR SPOUSE
You also have the option of providing a higher survivor pension for your spouse in increments of 5% ( i.e., 65%, 70%, 75%). To provide this increased benefit, your pension will be reduced. You must inform OPTrust before you retire if you want to increase your spouse’s survivor pension.
If you apply at least two years before your pension begins, no medical information is necessary. If you apply within two years of your retirement, we require a Certificate of Health and OPTrust must approve your application. The necessary forms are available from your human resources representative or from OPTrust. You may cancel the higher survivor benefit at any time, up to one month before your pension starts. Once your pension begins, you no longer have the option to cancel the increased survivor pension. This means that if your spouse dies before you do, you continue to receive a reduced pension.
Below are examples showing the pension that would be paid to the spouse in three different scenarios:
Example "A" shows there is no actuarial reduction to the member's pension when the survivor pension is 60% -- the survivor's monthly pension is $840.
In example "B", the surviving spouse was not the spouse both when the member terminated from the Plan and when the pension started, and does not qualify as an "eligible" spouse, so the member’s pension is actuarially reduced to fund the entire 60% survivor pension.
Example "C" shows a 75% survivor pension with the actuarial reduction that is made to the member’s pension for the increased survivor pension. The resulting survivor pension is $962.
| A | B | C | |
|---|---|---|---|
| Member's age at termination | 65 | 65 | 65 |
| Spouse's age | 63 | 60 | 54 |
| Spouse, at termination and when pension began? | yes | no | yes |
| Member's integrated pension | $1,400 | $1,400 | $1,400 |
| Member's integrated pension after spousal reduction | $1400 | $1,167 | $1,282 |
| Per cent to surviving spouse | 60% | 60% | 75% |
| Surviving spouse's pension | $840 | $700 | $962 |