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.

Factors to consider when choosing a pension option

The pension option you choose when you retire is one of the most important financial decisions you’ll make; it will affect you for the rest of your life.

No matter which pension option you choose, you will receive a monthly pension until you die. However, your choice of pension option will determine the amount paid to you each month and the amount paid to your spouse or beneficiary(ies) after you die.

To decide which pension option is best for you, you’ll want to consider:

  • Your age and your spouse’s age
  • The health and life expectancy of you and your spouse
  • Your dependants and their financial needs
  • Your family and its financial situation
  • Your income needs and future plans
  • Other factors that may apply to your personal situation
  • Ways you want to provide for others

Single life versus joint life pension options

You need to decide between a single life or joint life pension. Your decision will depend on whether you have a spouse and if they will need any of your pension income after your death.

If you have a spouse, by law, you are required to choose a minimum 60% joint life pension. However, your spouse can sign a waiver giving up this right.

You can only choose a single life option if either of the following applies:

  • You do not have a spouse
  • Your spouse has signed a waiver giving up their right to a minimum 60% joint life pension

Guarantee periods

A guarantee period determines how long your pension will be paid to a beneficiary. If you die within the guarantee period, the remaining benefit will be paid to your named beneficiary(ies) until the guarantee period ends.

You can choose a guarantee period of 5, 10 or 15 years. A shorter guarantee period will result in higher monthly payments.

Important things to keep in mind

You have 60 days after the date on the letter notifying you that your pension has been granted to change your pension option. After that time, your selection is final. If you have a spouse, you may not be able to change your pension option after your pension has been granted.

If you have a former spouse, you may be required to provide them a share of your pension under the terms of your signed separation agreement or registered court order.

We recommend that you speak with an independent financial adviser before making your pension option decision.

Your pension accrual rate, one of the variables used to calculate your lifetime pension, increased from 1.85 per cent to 1.90 per cent effective January 1, 2019. To find out more, read the Board Communique from March 19, 2018.