Choose your pension option
This important decision will determine the amount of your lifetime monthly pension payments and the amount your spouse or beneficiaries may receive when you die.
Single life pension optionsYou can choose a single life pension option if you are single or your spouse has waived their right to the minimum 60% joint life pension.
With a single life pension, you can choose a lifetime monthly pension payment with:
- A guarantee period of 5, 10 or 15 years
If you die before the end of the period, your pension benefit will be paid to your beneficiary (or beneficiaries) for the remainder of the guarantee period only. Your beneficiary (or beneficiaries) will receive either the continuation of your monthly pension or a lump-sum payment.
For example, if you choose a single life pension guaranteed for 10 years, you are guaranteed 120 pension payments. If you die before 120 payments have been made to you, what's left of your pension will be paid to your beneficiary (or beneficiaries).
If you live beyond the guarantee period, you will continue to receive your monthly pension for the rest of your life. However, when you die, no pension will be paid to your beneficiary (or beneficiaries).
Beneficiary options with a single life pensionWhen you choose a single life pension, you can name an individual, an organization or your estate as your beneficiary (or beneficiaries).
If you have a spouse, you can only choose a single life pension if your spouse signs a waiver to give up their right to a 60% joint life option. Even if your spouse waives that right, they will remain the beneficiary for your guarantee period. To name a beneficiary other than your spouse for your guarantee period, your spouse must also waive their beneficiary rights.
Why choose a single life pension?
If you die within the guarantee period, your beneficiary will receive a time-limited monthly income. This option often appeals to single members with dependants. The following examples show how the single life option works:
- You have an 11-year-old child when you retire and select a 15-year guarantee. If you name your child (or a trustee or trust set up for your child under 19) as your beneficiary and die within the 15-year guarantee period, your child will receive a monthly income until they are 26.
- Your spouse (who has given up their right to a joint life pension) has an RRSP but wants to defer cashing it in until age 71. You can support your spouse until they can access the RRSP income by selecting a 5-, 10- or 15-year guarantee period, depending on their age.
- Your family history suggests that you will have a shorter life expectancy; choosing a longer guarantee period may allow you to leave a benefit to your estate.
Important things to keep in mind
- If you outlive the guarantee period, your spouse or beneficiaries will not receive any of your pension
- If you have a spouse, you can only choose a single life pension if your spouse waives their right to a joint life pension