Death Before Retirement

It’s difficult to think about what will happen to your loved ones after you pass away. One thing you may want to know is what happens to your pension. We’re here to make sure your wishes are carried out.

It’s very important that we’re contacted as soon as possible after your death. Once we have the documentation we need, we can tell the people who are entitled to receive a benefit about their options.

What those options might be depends on whether you were vested or not at the time of your death and who receives the benefit. If you have a spouse or partner, they will always be first in line to receive any payment from the Plan should you pass away. If you pass away without a spouse or partner, or if the pension partner survivor benefits have been waived, your chosen beneficiaries will receive your death benefit.

If You Had Less Than Two Years of Service (Not Vested)

If you have a spouse or partner, they will be entitled to a refund of your PSPP pension contributions, plus interest. They will have the option of receiving the one-time payment as a taxable cash payout or transferring the amount to a registered retirement savings vehicle.

If you do not have a spouse or partner then your chosen beneficiaries will be entitled to your contributions, plus interest. They will receive the one-time payment as a taxable cash payout.

If you do not have a beneficiary, your contributions plus interest will be paid to your estate.

If You Had Two or More Years of Service (Vested)

If you have a spouse or partner, they are entitled to a survivor benefit and can elect either a commuted value lump-sum payment or a monthly pension benefit. The commuted value lump sum payment option is available to your spouse or partner for 180 days after being advised of their entitlement.

Commuted value lump-sums are normally transferred to a Locked-In Retirement Account (LIRA). Any non-locked funds, such as excess contributions, are paid as a taxable cash lump sum payment or transferred to a Registered Retirement Savings Plan (RRSP).

If you do not have a spouse or partner (or if they signed a waiver giving up the right to a benefit if you pass away before retirement), then your chosen beneficiaries will be entitled to a one-time payment based on the commuted value of the pension. This benefit, including any excess contributions, is paid out as taxable cash.

If you don’t have a beneficiary in your pension profile, the benefit will be paid to your estate.

Unlocking Your Pension Due to Shortened Life Expectancy

If you have been diagnosed with an illness or disability that is terminal or will shorten your life expectancy considerably, you may be eligible to unlock all or a portion of your PSPP benefit entitlement.

This option is only available to members who have not yet retired and have not yet started receiving a PSPP pension benefit.

Please contact the Client Service Advocate at 1-888-643-1337 or via email at clientadvocate@apsc.ca for more information

Waiving Survivor Benefits

Your pension partner has the right to waive their entitlement to pre-retirement survivor benefits. Waiving this entitlement means your pension partner will not receive a survivor benefit if you pass away before they do. Instead, PSPP will pay any survivor benefit to your beneficiaries when you pass away.

Since everyone’s personal and financial circumstances are different, you may wish to seek out independent professional financial advice before making any final decisions on waiving survivor benefits.

Did You Know?

LIRAs have strict rules about how and when the funds within them can be accessed. Normally, money cannot be taken from a LIRA until the holder reaches age 50, but you can get more details about converting LIRA funds from the Government of Alberta’s Private Sector Pensions page.