Pension Benefits: Options at Retirement

The normal form of pension under the Plan is the Single Life monthly pension with a five-year guarantee period. 

If you have a spouse/common-law partner at retirement, legislation requires that you select a Joint and Survivor form of pension, unless the spouse/common-law partner waives their entitlement to the pension benefit. 

The following pension options are available to you at retirement:

Single Life Options  

The Single Life option provides a monthly pension for your lifetime and guarantees the full amount of the pension to the end of the 5, 10 or 15-year guarantee period you select. If you die before the guarantee period ends and your beneficiary is a spouse/common-law partner, they continue to receive the full monthly pension for the remainder of the guarantee period. If you die before the guarantee period ends and your beneficiary is not a spouse/common-law partner, the beneficiary will receive the lump sum value of the remaining guaranteed monthly pension payments.

66 2/3% Joint and Survivor Options  

The 66 2/3% Joint and Survivor option provides a monthly pension payable for your lifetime, with the full amount of pension guaranteed for 5, 10 or 15 years. It provides you with a slightly larger monthly benefit compared to the 100% Joint and Survivor option.

If you die before the guarantee period ends, your spouse/common-law partner will continue to receive the full pension until the end of the guarantee period. After the guarantee period, your spouse/common-law partner receives 66 2/3% of the amount of pension benefit you would have received had you not died. Your spouse/common-law partner continues to receive that portion (66 2/3%) for the remainder of their lifetime.

If you die after the guarantee period ends, your spouse/common-law partner will receive 66 2/3% of the pension benefit you would have received had you not died. This portion 66 2/3%) is paid to your spouse/common-law partner for the remainder of their lifetime.

If both you and your spouse/common-law partner die before the guarantee period ends, the estate of the last survivor will receive the lump sum value of the remaining guaranteed monthly pension payments.

100% Joint and Survivor Options    

The 100% Joint and Survivor option provides a monthly pension with the full amount of the benefit payable for your life and/or your spouse/common-law partner’s life. The full amount of the pension benefit is guaranteed for the selected 5, 10 or 15 years. If both you and your spouse/common-law partner die before the guarantee period ends, the estate of the last survivor will receive the lump sum value of the remaining guaranteed monthly pension payments.

Guarantee Periods 

If you die before the end of the guarantee period, your beneficiary is guaranteed a pension benefit payment per the examples below. 

Example 1: You start your pension at age 60, select the 66 2/3% Joint and Survivor option with a five-year guarantee, then die at age 62. Your spouse/common-law partner would receive the full amount of pension benefit for the three years remaining in the guarantee period. Following those three years, they would receive 66 2/3% of the benefit amount that would have been payable to you, had you not died.

Example 2: You start your pension at age 55 and select the Single Life option with a 10-year guarantee. If you die at age 59 (four years into the guarantee period) and:

• Your beneficiary is a spouse/common-law partner: your beneficiary would continue to receive the full monthly pension payments for the remaining six years of the guarantee period
• Your beneficiary is someone other than a spouse/common-law partner: a lump sum payment, equal to the commuted value of the remaining six years of full monthly pension payments, would be paid.

Integration with OAS (Level Income) Option

If you retire before age 65, the Integration with OAS (Level Income) option provides you with a way to balance your retirement income between the Pension Plan and OAS. OAS is a federal government benefit that a member may be eligible for at age 65.

How it works: If you retire before age 65 and choose the Integration with OAS (Level Income) option, the Pension Plan advances you a portion of the OAS you may be entitled to at age 65. The portion the Plan advances is based on the current amount of OAS benefit available to individuals who are age 65. The advance is in addition to your full monthly HEPP pension benefit.

When you reach age 65:

• The portion of the OAS amount that was advanced by the Plan until you reached age 65, is no longer provided, and your monthly HEPP pension is reduced to recover the amount advanced 
• A reduction is applied to your HEPP pension for your lifetime, as well as to the survivor benefit, if applicable
• You must apply for the OAS benefit directly from the federal government. If you are eligible for the OAS benefit, the amount you receive from OAS should offset the reduction to your HEPP monthly pension.

Choosing the Integration with OAS (Level Income) option does not affect the OAS benefit that you may be eligible to receive from the federal government. For more information on federal benefits, please contact Service Canada at 1-800-277-9914.

If you have a spouse/common-law partner at retirement, legislation requires that your spouse/common-law partner consents to the Integration with OAS (Level Income) option.

As with selecting your pension option, you should carefully consider your personal situation when deciding whether or not to select the Integration with OAS (Level Income) option.