Your pension is a valuable asset to which you and your employer have contributed to over the course of your career. By setting aside an amount from each paycheque, you have been able to ensure a secure and lifelong source of income. Now that you are approaching retirement and are reflecting upon your estate planning you will begin to realize one of the key aspects is your pension benefit. Not only will it provide financial security for you, it may also do the same for your loved ones, as well as other people or organizations in your life that you care about.
In the event of your death, your pension can be a valuable and important benefit for those left behind. Being able to nominate one or more beneficiaries to receive your pension benefit when you die means you have options to protect your family, leave a legacy to your community and customize your estate planning the way you want.
What does nominating a beneficiary mean?
Your beneficiary is the person(s) or organization(s) that
you choose to receive your pension benefits after your death. Your spouse is automatically
your beneficiary if you are married or in a common-law relationship, unless
your spouse signed a document waiving their rights to your future pension
benefit. This means your ability to name other beneficiaries may be limited
because under pension legislation your spouse has certain rights to your
pension. You can also make your estate your beneficiary if you so choose or it
will automatically become your beneficiary if you do not make a selection at
all. The term nominate means to choose or name or designate,
and in this situation refers to you choosing who or which organization receives
any pension benefit due after your death.
In the event of your death, the pension plan will refer to
the most recent Nomination of Beneficiary (at Retirement) or Change
of Beneficiary (for Retired Member)form on file (or to your will,
if your executor indicates that beneficiaries are nominated in it) to process
any remaining pension benefit payable. Ensuring the pension plan has up-to-date
beneficiary informationon file is the best way to ensure that your final
wishes with respect to your pension benefit are followed.
This guide is intended to help you understand the options
available when choosing or changing a beneficiary (or beneficiaries) for your
pension. Since everyone’s circumstances are unique, you are strongly encouraged
to consult your financial advisor, estate planner and/or lawyer to determine
the options that are best for you. The rest of this section will help you
understand different types of beneficiaries, the nomination process, and
whether or not the pension option you select at retirement will allow you to
change your beneficiary. There are a number of nomination options listed in the
following section “Beneficiary options when retiring,” including nominating
multiple or alternate beneficiaries and nominating an organization or trust, which
you may wish to consider should they be available to you.
Why is it important to nominate a beneficiary for
Your pension is a valuable financial asset. Nominating a
beneficiary (or a number of beneficiaries) ensures your wishes can be granted,
in relation to what happens to your pension after you die.
are the different types of beneficiaries?
A beneficiary is nominated to receive a post-retirement
death benefit in the event that you die and there is a benefit payable. Each
beneficiary can have one or more alternate beneficiaries designated, which
means that if the beneficiary has also died at the time of your own death, an
alternate(s) can be paid instead.
An alternate beneficiary can be nominated to receive a
benefit in the event that the beneficiary dies before you.
How do I nominate a
beneficiary when I am retiring?
By filing a Nomination of Beneficiary (at Retirement) form (included within your Retirement Application Package, or available by contacting the Teachers' Pension Plan — see Contact tab above). If you choose to nominate a beneficiary using the Nomination of Beneficiary (at Retirement) formyou must make
sure that the information is on file with the pension plan. You must sign and
date your nomination in order for it to be valid.
You can also name beneficiaries for pension purposes in your
will. If you do so, it is important that you identify the pension plan by its
full name, name the beneficiaries and alternates, and designate a specific percentage
of the pension entitlement you want left to each beneficiary.
You may wish to consult an estate planner, lawyer and/or
other advisor for guidance on how to make sure your wishes are reflected in the
most recent copy of your will or Nomination of Beneficiary (at Retirement) form
Will I be able to change my
beneficiary after I have retired?
Your ability to change your beneficiary or have multiple
beneficiaries is based on the pension option selected at retirement – for
example, the pension option includes a guarantee period, and that period that has
not expired. Estate planning can be a complex matter given the unique needs of
individuals and the complicated structure of many families these days. The
decisions you make before you retire are important – they will be with you, and
possibly your spouse, for the rest of your lives.
With the guidance of an estate planner, lawyer and/or other
advisor, you (and your spouse, if you have one) can decide which pension option
is right for you. Here are some things to consider:
your age and your spouse’s age
your health and your spouse’s health and life expectancy
dependants, family and financial situation
income needs and future plans, and
other factors that may apply to your personal situation.
All beneficiary choices can include designations for alternate beneficiaries. In the event of a marital breakdown after retirement, you should refer to legal counsel for advice and the Teachers’ Pension Plan for additional information.
How do I change my beneficiary?
In some cases you may not be able to, since your spouse may already be your beneficiary. If you are eligible to change your beneficiary, you can file a Change of Beneficiary (for Retired Member)
form. If you choose to change a beneficiary you must make
sure that the information is on file with Pension Services. You must sign and
date your nomination in order for it to be valid.
Alternatively, you can name beneficiaries for pension
purposes in your will. If you nominate beneficiaries for your pension
entitlement in your will, it is important that you identify the pension plan by
its full name, name the beneficiaries and designate a specific percentage of the
pension entitlement you want left to each beneficiary. You may wish to consult
an estate planner, lawyer and/or other advisor for guidance on how to make sure
your wishes are reflected in your will.
Disclaimer: Protecting your Pension Benefit: A Guide for Nominating Beneficiaries when Retiring is published for the Teachers' Pension Plan by the Pension Corporation. This publication is based on the relevant plan rules, regulations and statutes respecting the pension benefits available under the Teachers' Pension Plan. If there is a discrepancy between this publication and the relevant plan rules, regulations and statutes respecting the pension benefits available under the Teachers' Pension Plan, the latter will apply.