What do retirement plans provide when a contributor dies?

Here's a look at what public plans, private plans and other organisations offer when a contributor dies.

Québec Pension Plan (QPP)

The Québec Pension Plan (QPP) provides benefits to the next of kin of workers who have sufficiently contributed during their lifetime.

What does "have sufficiently contributed" mean?

• Having contributed for at least one third of the contribution period* and for at least 3 years
  
  or
• having contributed for at least 10 years.
  
  * Your contribution period begins the year you reach age 18 or January 1, 1966 if you reached age 18 before that date. Your contribution period ends when you begin receiving your pension, when you die, or when you reach age 70.

Currently, eligibility for survivors' benefits is determined by taking into account only the contributions made by the deceased before he or she began receiving a retirement pension under the Plan. As of January 1, 2013, all contributions made by a worker will be taken into account to determine eligibility for survivors' benefits, regardless of whether the contributions were made before or after retirement. This change will ensure that work done after retirement is recognized.

As of January 1, 2013, the eligibility requirements for survivors' benefits will be relaxed for persons who were entitled to an Amount for a Severe and Prolonged Impairment in Mental or Physical Functions during their contributory period.

Specific eligibility requirements will apply to those contributors:

• They must have contributed to the Plan for a quarter of their contributory period and for at least three years
• They must not have received a retirement pension or disability pension under the Plan.

The QPP provides 3 types of benefits in the event of a contributor's death:

• The death benefit
  
  This benefit is a lump-sum payment of $2,500. Within 60 days of the death, a payment is made to the person or the charitable organisation who paid for the funeral expenses, but only up to the amount paid if less than $2,500. The remainder, if any, can be paid to the estate. After 60 days, the benefit can be paid to the heirs. If there are no heirs or if the heirs have renounced the estate, the benefit can be paid, in the following order, to the deceased person's spouse, descendants, or ascendants.
  
  The death benefit amount is taxable. It must be included in the estate's income tax return.
  
  Currently, entitlement to a death benefit is determined according to the number of years the deceased person contributed to the Plan. As of January 1, 2013, the requirement will be relaxed, and the death benefit will be paid without considering the number of years of contribution. Deceased persons who did not accumulate enough years of contribution will give their loved ones entitlement to a death benefit if they made at least $500 in contributions to the Plan and no retirement pension or disability pension was paid to them. However, the death benefit amount will be equivalent to the contributions paid (between $500 and $2,500).

• The surviving spouse's pension
  
  This pension is intended to ensure a base income for the deceased contributor's spouse. It can be paid:
  
  • to married spouses (of same sex or different sex) who are not legally separated
  • to civil union spouses (of same sex or different sex)
  • to de facto spouses (of same sex or different sex)
  • to legally separated spouses, under certain conditions

  Note that the Régie des rentes du Québec considers your de facto (common law) spouse to be the person with whom you have been living in a conjugal relationship for:

  • at least 3 years
    
    or
  • 1 year if a child has been or is to be born of your union or if you have adopted a child.

  The amount of a surviving spouse's pension varies according to the following factors:

  • the contributions that the deceased made to the Plan;
  • the surviving spouse's age;
  • whether the surviving spouse supports dependent children of the deceased person;
  • whether the surviving spouse is disabled;
  • whether the surviving spouse is already receiving a retirement or a disability pension.

  Amounts indicated below are valid until December 31, 2012.

  Your age	Your situation	Surviving spouse's maximum monthly pension
  Under 45	Without dependant children	$484.09
  Under 45	With dependant children	$783.62
  Under 45	Disabled, with or without dependant children	$815.47
  From 45 to 64		$815.47
  65 or over	You are not receiving a QPP or CPP retirement pension	$592.00

  ---

  All QPP pensions are indexed in January of each year in order to account for inflation. They are also taxable.
  
  You can receive both the surviving spouse's pension and a pension benefit - or - the surviving spouse's pension and a disability pension. In either case, the Régie pays both pensions in a single monthly payment. We then refer to it as a « combined pension ». The amount of the combined pension is not necessarily equal to the sum of both pensions, since it is subject to a maximum determined by law.
  
  Note that:

  • If your spouse dies in your first year of marriage or civil union, specific rules apply.
  • If your spouse was receiving a pension benefit at his or her death, his or her pension payment will cease.
  • If you receive a surviving spouse's pension and you remarry, you will not lose your surviving spouse's pension.

The surviving spouse's pension will not be affected by the amendments to the Act. However, as of January 1, 2013, the pension amount could increase if the deceased spouse was entitled to a retirement pension supplement. The supplement may be taken into account in calculating the surviving spouse's pension. This change will recognize the deceased person's work after his or her retirement pension began so that his or her spouse can benefit from it.

• The orphan's pension
  
  

  The person whose dependant is the minor child of the deceased person will receive an orphan's pension until this child reaches 18 years of age. As of January 1, 2012, the orphan's pension will triple for new and current beneficiaries. The new amount will be $224.62 a month in 2012.

For more information on QPP death, consult www.rrq.gouv.qc.ca/en under the section entitled « Death ».

The Canada Pension Plan and the Old Age Security program

If you work elsewhere in Canada, you probably contribute to the Canada Pension Plan (CPP). This plan also pays death benefits, but the legislative provisions that govern these benefits are different than for the QPP.

Widowed persons aged 60 to 64 could also be entitled to the Allowance for the survivor from the Old Age Security OAS program.

For more information on the CPP and the OAS program, consult www.servicecanada.gc.ca under the section entitled "Seniors".

If the deceased person has worked outside Canada

He or she may have contributed to another country's plan and you could be entitled to some benefits. If the Québec or federal government has established a social security agreement with that country, the Régie des Rentes du Québec or Service Canada could assist you with the process. For more information, consult www.rrq.gouv.qc.ca/en under the section entitled "Work" and follow the link for "International Agreements", and consult www.servicecanada.gc.ca.

Private pension plans

When a person participates in a private pension plan, benefits are usually paid upon his or her death. Check with the administrator of that person's pension plan to see if such benefits are provided.

Other benefits in case of death

In addition to the death benefits mentioned above, there are also those provided by various other organisations:

Insurance companies

Some insurance companies offer individual or group life insurance. Check if the deceased person held such an insurance policy and check the payment conditions of the benefits.

The Commission de la santé et de la sécurité du travail (CSST)

The CSST provides a death benefit when a person's death is caused by a work-related accident or illness. For more information, check with the deceased person's employer.

The Société de l'assurance automobile du Québec (SAAQ)

The SAAQ provides a death benefit when a person's death is caused by a traffic accident. Consult www.saaq.gouv.qc.ca/en under the section entitled "Accident victim" for more information.

The Ministère de l'Emploi et de la Solidarité sociale

The Minstère de l'Emploi et de la Solidarité sociale can grant a special allowance for funeral expenses, even if the deceased person was not receiving last resort financial assistance (welfare). For more information, consult www.mess.gouv.qc.ca/index_en.asp under the section entitled "Financial assistance".

The help desk for victims of criminal acts

Québec has implemented measures intended to help and compensate victims of criminal acts. For more information, consult www.ivac.qc.ca under the section "Victimes d'actes criminels" (French only).

Worth knowing about...

• Each plan or program has its own definition of a de facto (common spouse) spouse. You must check the definition with each potential organisation that might eventually pay you a benefit.