Choosing how a workplace pension will be paid can affect two lifetimes, not just the retiree’s. For someone with a spouse or common-law partner, pension legislation may require a form of pension that continues paying the survivor after the pension member dies. The retirement paperwork determines the form that actually goes into payment.
- A Joint and Survivor Pension Covers Two Lifetimes
- The Survivor Percentage Determines What Continues After Death
- The Election Happens Before the Pension Starts
- Having a Spouse Can Limit Which Pension You Can Elect
- Choosing a Single-Life Pension May Require a Spousal Waiver
- A Higher Survivor Percentage Can Change the Starting Pension
- The Election Can Be Difficult to Change Once Payments Begin
- Other Questions About Joint and Survivor Pensions
A joint and survivor pension pays the pension member for life and, if the eligible spouse survives them, continues paying that spouse for life. The survivor percentage depends on the applicable pension rules and option selected. The election normally happens before pension payments begin, and an eligible spouse may need to formally waive statutory survivor protection before a different pension form can be chosen.
A Joint and Survivor Pension Covers Two Lifetimes
The defining feature is what happens after the pension member dies. Unlike a single-life pension that generally ends with the pensioner’s lifetime, a joint and survivor pension provides continuing lifetime income to the surviving spouse.
Ontario’s pension terminology, for example, defines a joint and survivor pension as one payable to the retired member until death and then to the surviving spouse until the spouse dies. The pension paid to the survivor can be lower than the amount previously paid to the member.
This is one specific form of the broader survivor protection available through workplace pensions. It matters primarily at retirement because that is when the member’s accumulated pension entitlement is converted into a particular stream of payments.
The Survivor Percentage Determines What Continues After Death
A pension described as “joint and survivor” does not tell you the survivor’s exact payment by itself. You also need the survivor percentage.
For example, a 60% joint and survivor pension means the surviving spouse receives 60% of the applicable pension after the pension member dies. If the pension immediately before death were $3,000 a month, a straightforward 60% survivor provision would produce $1,800 a month for the survivor.
The percentage can be governed partly by pension legislation and partly by the options available under the plan. Under British Columbia pension rules, an applicable joint and survivor pension must leave the spouse with at least 60% of the member’s monthly pension if the member dies first. Manitoba likewise requires the applicable survivor pension to be at least 60% of the pension paid to the member.
Those examples should not be turned into a blanket assumption that every Canadian pension follows identical rules. Workplace pensions can fall under different provincial or federal legislation, and the plan may offer survivor options above the statutory minimum.
The Election Happens Before the Pension Starts
When retirement approaches, the pension administrator normally provides the member with retirement options and the amounts payable under them. This is the point where the joint and survivor election becomes concrete rather than theoretical.
The options can show different monthly pension amounts depending on the payment form. A member might see one amount for a single-life pension and other amounts for joint and survivor options. The plan documents explain what happens to each option when either person dies.
For someone comparing the figures, the largest starting payment should not automatically be treated as the most valuable option. A single-life pension can provide more income while the member is alive because it does not provide the same lifetime income protection for a surviving spouse. Ontario’s pension regulator describes a single-life pension as providing the largest monthly pension but no continuing income to a surviving spouse who outlives the retired member.
The useful comparison is therefore not simply “$2,600 versus $2,400 a month.” You need to compare what each amount buys, including how much continues to the other person and for how long.
Having a Spouse Can Limit Which Pension You Can Elect
A member with an eligible spouse cannot necessarily reject survivor protection simply because another pension option pays more each month.
For example, Manitoba requires an applicable pension for a member who has a spouse or common-law partner when payments commence to be a joint pension payable over both lives, subject to statutory exceptions. British Columbia likewise requires the joint and survivor form for an eligible member with a spouse.
That protection belongs partly to the spouse, which changes who controls the decision. The member cannot always make a unilateral election for a single-life pension and eliminate the spouse’s statutory survivor entitlement.
This also means the definition of “spouse” matters. Pension legislation can define married and common-law relationships differently across jurisdictions. Before choosing a retirement option, confirm which pension legislation governs the plan and whether the plan recognizes someone as the spouse for survivor-benefit purposes.
Choosing a Single-Life Pension May Require a Spousal Waiver
Where legislation permits survivor protection to be waived, the waiver must follow the applicable legal process. Simply checking “single life” on the member’s retirement form does not necessarily accomplish that.
In Ontario, the current Waiver of Joint and Survivor Pension is specifically used by members or former members and their spouses to waive entitlement to the joint and survivor pension. British Columbia requires the spouse to sign its prescribed waiver in front of a witness no more than 90 days before pension payments begin. Manitoba also requires the spouse or common-law partner to complete the prescribed waiver before a pension without the required survivor benefit can be paid.
We would treat that signature as much more than routine retirement paperwork. The spouse can be giving up lifetime pension income that would otherwise become payable after the member’s death. The higher pension available to the member today has to be weighed against the income the surviving spouse would lose later.
A Higher Survivor Percentage Can Change the Starting Pension
Some plans provide more than one joint and survivor option. Where choices are available, greater survivor protection can affect how much the member receives when retirement begins.
The reason is actuarial rather than a penalty for protecting a spouse. The pension must account for the possibility that payments will continue over two lives. Manitoba’s pension guidance confirms that the amount payable at retirement may be reduced when survivor benefits are provided so that payments can continue throughout both lifetimes.
Consider two options where one leaves a smaller survivor pension and another leaves a larger one. The option promising more income to the surviving spouse may begin with a lower payment to the member. The actual difference comes from the plan’s calculations, so the retirement statement is more useful than trying to estimate the adjustment independently.
Anyone with a defined benefit pension should compare the quoted options side by side before making the election. The percentage continuing after death matters just as much as the first monthly deposit.
The Election Can Be Difficult to Change Once Payments Begin
The safest time to resolve questions about a joint and survivor pension is before the pension commencement date.
Waiver rules illustrate why timing matters. Under Manitoba’s current rules, for example, a spouse or common-law partner who waived the joint pension can revoke that waiver before pension payments begin. Once a pension is in pay, the rules governing changes become much narrower and depend on the applicable legislation and circumstances.
Before signing the retirement package, we would write down four figures from the plan’s quotation: the member’s starting pension, the survivor percentage, the survivor’s resulting pension and the payment under any alternative option being considered. That simple comparison exposes what is actually being exchanged for a higher or lower starting pension.
Other Questions About Joint and Survivor Pensions
Is a joint and survivor pension the same as naming your spouse as a beneficiary?
They are different arrangements. A joint and survivor pension establishes continuing lifetime pension payments for the eligible spouse under the pension option. A beneficiary designation deals with benefits payable to a beneficiary under the plan’s applicable death-benefit provisions.
What happens if the spouse dies before the pension member?
The member continues receiving their pension. Whether the payment changes after the spouse’s death depends on the pension option and plan terms. Do not assume that a reduced joint and survivor pension automatically increases to the single-life amount.
Can a common-law partner qualify for a joint and survivor pension?
A common-law partner can qualify where they meet the definition of spouse or common-law partner under the legislation governing the pension. Those definitions are not uniform across Canada, so the plan administrator should confirm whether the relationship meets the applicable test before the retirement election is completed.
Is a joint and survivor pension the same as a pension guarantee period?
A guarantee period promises payments for a specified minimum period if death occurs early. A joint and survivor pension instead provides lifetime payments to the surviving spouse. Some pension options can combine survivor protection with a guarantee, but the two features solve different problems.
