Survivor's Benefits - July 2005

Section 2: Your Pension Cheque

Calculating your pension

The survivor's pension which you are receiving is approximately one-half of the pension the plan member was entitled to receive without any reduction for early retirement or for the integration with the Canada/Quebec Pension Plan. The formula for calculating your basic monthly pension is one percent for each year of pensionable service credit, to a maximum of 35 years, multiplied by the plan member's average annual salary during the best five years, divided by 12. The average salary is calculated over a six-year period if the plan member retired before June 17, 1999.

For example, if the plan member had 25 years of pensionable service credit and an average annual salary of $36,000 the monthly pension would be:

If any of the service was part-time, the benefit for that period will be reduced to reflect the difference between the assigned hours versus the full-time hours for that position. Also, if you qualify for a survivor allowance but had received a payment under the Pension Benefits Division Act, the service on which the division payment was based will be excluded from this calculation.

If you were married after the plan member retired or you are the widower of an employee who retired before December 20, 1975, your spouse had to elect to receive a reduced pension to provide survivor benefits. Your pension was calculated at that time using actuarial assumptions.

Pension payments

Your pension is payable in monthly installments at the end of the month during your lifetime. If you receive your cheque at home, it should arrive by the end of the month.

If your pension payment is deposited directly to your bank account through Direct Deposit, the funds are credited on the third last banking day of each month.

Contact the Client and Employer Advisory Services if:

• your cheque has not been delivered by the end of the month; or
• the payment amount is not credited to your account by the third last banking day of the month.

As a signed cheque is the equivalent of cash and could be negotiated by anyone, you should only endorse your cheque when you arrive at the bank. Should you lose a cheque or have it stolen, call the Client and Employer Advisory Services for assistance. To avoid mail delays and lost cheques, it is recommended that your pension be deposited directly in your bank account. To obtain details, call or write to the Client and Employer Advisory Services.

Your pension cannot be garnisheed or assigned, except to satisfy a debt due to the Crown, such as income tax arrears. Survivor benefits cannot be diverted to pay maintenance or support.

Deductions from your cheque

You can ensure that the proper deductions are being made by reviewing your Direct Deposit payment statement or the stub attached to your monthly cheque. This shows your gross monthly pension and the amounts being deducted. You will receive a payment statement or cheque stub each January and in any month in which your net pension changes by more than two dollars.

Questions regarding the amount of income tax you should pay, quarterly tax payments, non-resident taxes and special exemptions must be addressed to the Canada Revenu Agency (CRA) or Revenue Quebec (whichever is appropriate). These telephone numbers are listed in the blue pages of your telephone book.

Questions regarding Canada Pension Plan, Quebec Pension Plan or Old Age Security should be directed to Social Development Canada. The telephone number is in the blue pages of your telephone book.

The number shown under "Superannuation No." (see illustration below) is your pension number. You should include it in all correspondence with us to help ensure a prompt reply.

Retain your cheque stubs in order to have a file of reference material for use in auditing your income tax statement ("Statement of Pension, Retirement, Annuity, or other Income", T4A, Relevé 1, Relevé 2 or NR4) which is forwarded to you annually, usually in February. If you are receiving benefits from a Retirement Compensation Arrangement you will also receive a T4A-RCA statement.

If you wish to increase the amount of income tax deducted from your pension, just call or write to the Client and Employer Advisory Services specifying the exact monthly amount.

If you intend to reside outside of Canada, you may obtain information about your tax situation from the booklet "Income Tax and the Non-Resident", available from CRA.