Q. Are any benefits paid from the Plan when I die?
A. Under certain circumstances, benefits from the Plan may be payable or continue after your death.
If you die as an active employee
Your survivors may be entitled to the following benefits from the Pension Plan if you die as an active employee with a vested benefit.
With less than 15 years of service — surviving spouse annuity
If you have less than 15 years of benefit service or are a non-regular or extended part-time (enhanced non-regular) employee when you die, the Pension Plan will pay a Surviving Spouse Annuity. The government requires that the Surviving Spouse Annuity provide a lifetime income to your surviving spouse if you have been married for at least one year.
A Surviving Spouse Annuity is half of your basic pension benefit earned up to the date of your death, payable under the Qualified Joint and Survivor Annuity option.
Your surviving spouse may begin receiving the Surviving Spouse Annuity as early as the month in which you would have attained age 50, and as late as the time you would have attained age 65. The adjustments for early commencement for terminees (see more on Terminees in the section on Receiving your pension benefit), apply to the Surviving Spouse Annuity.
If you have no surviving spouse eligible to receive the Surviving Spouse Annuity, there is no benefit payable from the Plan upon your death
With 15 or more years of service — pension death benefit
If you have 15 or more years of benefit service and you are not a non-regular employee (including an extended part-time employee) on your date of death, the Pension Plan will pay a Pension Death Benefit, which is significantly larger than the Surviving Spouse Annuity.
How it is calculated
The Pension Death Benefit is based on your total basic pension benefit plus your Pre-Social Security Pension earned under the Plan. The Pension Death Benefit is calculated as if you had retired as of the date of your death and had elected the lump sum payment option to be paid at age 50 or actual age if older at time of death. If you die before age 50, the Pension Death Benefit is the present value of the age-50 lump sum.
When it is paid
The Pension Death Benefit is paid as soon as practical after your death.
Who receives it
The Plan pays the Pension Death Benefit to the beneficiary designated on the special beneficiary designation form (which you can print from the HR Intranet).
To comply with the government requirement for surviving spouse benefits, your spouse must consent if you want to name someone other than your spouse as the primary beneficiary.
If you have not designated a Special Beneficiary prior to your death, the beneficiaries are determined by a default order, explained in the Default Beneficiary definition in the Key terms section.
Special note about special beneficiary designation:
If you are married and less than 35 years of age when you execute a Special Beneficiary Designation and you do not name your spouse as your primary beneficiary, then your special designation will become invalid when you attain age 35. Another beneficiary designation (with spousal consent) is required upon attaining age 35.
How it is paid
Your beneficiary can elect to receive the Pension Death Benefit either as a lump sum or as monthly payments for life.
The monthly payments are the lump sum Pension Death Benefit actuarially converted to the Basic Annuity (five-year certain and life), see section on Payment Options, using the interest rate in effect at time of your death.
If you die as a retiree
If you become a retiree and:
- Elect to begin your pension payments as soon as possible but die before that payment starts — The benefit will be paid in accordance with your election, as illustrated in the following example:
|If you elected a ...||Then ...|
|Basic Annuity or Extended Period Certain||Your beneficiary will receive the monthly benefit you would have received for 5 years or for the extended period certain.|
|Lump sum payment||The lump sum amount you would have received (including any Pre-Social Security amount you would have received) is paid to your estate.|
|Qualified Joint and Survivor Annuity||Your spouse will receive 50% of the monthly benefit you would have received.|
|50% Joint Annuity||Your joint annuitant will receive the monthly benefit you would have received and, after five years the amount is reduced to 50%.|
- Do not elect to begin your pension payments as soon as possible and die before your benefits begin — The death benefit payable from the Pension Plan is the Pension death benefit.
- Die after pension payments begin — The payment option that you chose determines whether any future benefits are paid.
If you die as a terminee
If you are a terminee and you die after pension payments begin, the form of payment that you chose determines whether any further benefits are paid.
If you are a terminee with a vested pension benefit and you die before pension payments begin but after being married at least one year, then your surviving spouse may be eligible for the Surviving spouse annuity.
Otherwise, no benefit is payable.
When payments or benefits begin
References to the date when payments or benefits begin mean the date your pension benefit is scheduled to begin under the terms of the Plan. This date may not be the same as the date you actually receive your first payment.