What Happens to Your Pension When You Die

OMERS Plan survivor benefits are paid according to a set order of entitlement that complies with the Ontario Pension Benefits Act. This order cannot be changed, for example, by a will.

 

If you die before retirement

Order of entitlement to survivor benefits:
  1. Spouse – Your pre-retirement spouse can choose a survivor pension or cash refund.
  2. Children – If there is no pre-retirement spouse, a children’s pension will be paid to any eligible dependent child(ren) for as long as they are eligible.
  3. Designated beneficiary – If there is no pre-retirement spouse or eligible dependent child(ren), your designated beneficiary(ies) on file may be entitled to a cash refund.
  4. Estate – If there is no pre-retirement spouse, eligible dependent child(ren), or designated beneficiaries, a cash refund may be paid to your estate.
See “Explanation of Survivor Benefits” below for details on survivor pension, children’s pension, cash refund and residual refund.

 

Additional refunds

In addition to the OMERS Plan survivor benefits, the following refunds may be payable in the event of death before retirement.

 

50% Rule refund

If your contributions plus interest from January 1, 1987 to the date of death are greater than 50% of the commuted value (CV) of the pension earned for the same period, OMERS will refund the difference to your designated beneficiary(ies) or, if none, to your estate.

 

Special refund

When the CV of your OMERS Plan pension is greater than the amount needed to fund the survivor benefit for your eligible dependent child(ren), the difference is paid as an OMERS Plan special refund. It is paid to your living designated beneficiaries on file or, if none, to your estate.

 

If you die after retirement

Order of entitlement to survivor benefits:
  1. Spouse – Your retirement-date spouse (or post-retirement-date spouse if there is no eligible retirement-date spouse) will receive a survivor pension.
  2. Children – If there is no retirement-date spouse or postretirement-date spouse, a children’s pension will be paid to any eligible dependent child(ren) for as long as they are eligible.
  3. Designated beneficiary – If there is no retirement-date spouse, post-retirement-date spouse or eligible dependent child(ren), your designated beneficiary(ies) on file may be entitled to a residual refund.
  4. Estate – If there is no retirement-date spouse, post-retirement date spouse, eligible dependent child(ren) or designated beneficiaries, any residual refund may be paid to your estate.
 
 

Explanation of survivor benefits

Survivor pension

An OMERS Plan survivor pension equals:
  • 66 2/3% of your lifetime pension*
  • plus a further 10% for each eligible dependent child, up to a total of 100% of the pension you earned.
The survivor pension is guaranteed for life (it does not stop if your spouse remarries) and is indexed for inflation. It does not include the OMERS Plan bridge benefit.
 

Children’s pension

An OMERS Plan children’s pension equals:
  • 66 2 /3% of your lifetime pension*; or
  • the survivor’s pension the spouse was receiving at their date of death (less any entitlement for eligible children). A children’s pension is divided equally among the eligible children and is paid to, or on behalf of, each child. When a child is no longer eligible, the benefit is redistributed among the remaining eligible children. It is indexed to inflation, and it does not include the OMERS Plan bridge benefit.
In the case of a surviving child being a minor, benefits of $10,000 or less can be paid to the adult who has custody of the child; benefits over $10,000 are subject to Guardianship of Property rules.

* For death before retirement, this is 66 2 /3% of the lifetime pension you earned to the date of death or to the date you left your OMERS employer. For death after retirement, this is 66 2 /3% of the lifetime pension you were receiving at the date of death.

 

Cash refund (pre-retirement death only)

The cash is paid in a lump-sum and equals:
  • the commuted value (CV) of the pension you earned since January 1, 1987; plus
  • any contributions you made before 1987, plus interest to the date of your death.
A spouse can transfer the cash refund to a non-locked-in registered retirement savings arrangement.

 

Residual refund (post-retirement death only)

The residual refund is the total of your OMERS Plan contributions plus interest, minus any pension paid to you and/or your survivors.

Note:
After about five years of retirement, most members have received pension payments equal to their contributions plus interest, so there may not be a residual refund.


 

Naming a designated beneficiary

Only the OMERS Plan member can name a beneficiary or beneficiaries. An executor, estate trustee, power of attorney for property or survivor cannot name or change your designated beneficiary(ies).

Complete the Beneficiary Information form and return it to OMERS if you wish to designate your beneficiary(ies) with OMERS.