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How can you plan for benefits for your survivors?

If you are receiving an OPTrust pension and die before age 65, your spouse or eligible child receives a a survivor pension based on 60% of the pension you were receiving. The survivor pension is recalculated to 60% of your lifetime pension, on what would have been your 65th birthday. If you die after age 65, your pension has already receiving your lifetime pension, 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 how a survivor pension changes if the member dies before age 65. At age 65, the member's pension would have been reduced for CPP integration. Therefore the survivor pension is reduced to 60% of the member's CPP integrated pension.

EXAMPLE:

Member's age at termination 58
Member's age at death 60
Spouse, at termination and when pension started yes
Member's pension (before age 65) $2,027
Member's lifetime 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's website. 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 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.

EXAMPLE      
Percentage to surviving spouse 60% 65% 70%
Member's age at termination 66 65 65
Spouse's age 62 62 62
Spouse at termination and when pension started? YES YES YES
Member's pension $2000 $1,979 $1,959
Surviving spouse's pension $1,200 $1,287 $1,371

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