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 will affect you for the rest of your life. It is one of the most important financial decisions you will make.

Your choice of pension option will determine the amount paid to you each month. It also determines the amount paid to your spouse or beneficiaries 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’s 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 choose either a single life or joint life pension. Your decision will depend on whether you have a spouse and if they are relying on having your pension income after your death. With a joint life option, if you die before your spouse, they will receive a portion of your monthly pension payment for the remainder of their life. Each joint life option has a different percentage and may have a guarantee period (5, 10 or 15 years).

Still if you have a spouse, they are entitled to receive a portion of your pension after you die. By law, you must choose a minimum 60 per cent joint life pension. You may choose a single life option or joint life option less than 60 per cent only if your spouse signs a waiver. By signing the waiver, your spouse is agreeing to give up (waive) or reduce their right to your pension benefit after you die.

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

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

(or beneficiaries) 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.

If you choose a single life pension option:

• If you die within the guarantee period, your pension benefit will be paid to your beneficiary (or beneficiaries) until the end of the guarantee period.
• If you live beyond the guarantee period, you will continue to receive your monthly pension for the rest of your life, but there will be no pension paid to your named beneficiary (or beneficiaries) when you die.

If you choose a 100% joint life pension option:

• Whether you die before or after the end of the guarantee period, your spouse will continue to receive 100 per cent of your pension for the rest of their lifetime. 
• If you and your spouse both die within the guarantee period, your pension benefit will be paid to the named beneficiary (or beneficiaries) of the last survivor for the remainder of the guarantee period.
• If you and your spouse both live beyond the guarantee period, you will continue to receive your monthly pension for the rest of your lives, but there will be no continuing pension paid to your named beneficiary (or beneficiaries) when you die.

If you choose a 60% joint life pension option:

• If you die within the guarantee period, your spouse will receive 100 per cent of your pension until the guarantee period ends. After the guarantee period, your spouse's pension payment will be reduced to 60 per cent for their lifetime.
• If you die after the guarantee period, your spouse will receive 60 per cent of your pension for the rest of their life.
• If you and your spouse both die within the guarantee period, your pension benefit will be paid to the named beneficiary (or beneficiaries) of the last survivor for the remainder of the guarantee period.

Important things to keep in mind

You have 60 days after your pension is 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.