Pensions

This could be the most significant financial decision that you make regarding your retirement. You need to ensure that you understand all of the choices. Once you have made your election, you cannot reverse your decision.”

 

The above statement really says it all when it comes to making a choice on your pension.

Understanding the Jargon

Single Life Pension

Pays you an income for as long as you are alive.

 

Joint Life Pension

Pays an income as long as you and/or your spouse are alive.

 

Guarantee Options

Provide a minimum time that your pension will continue. In the event that either you and/or your spouse die before the end of the guarantee period, the income would be payable for the balance of the guarantee period elected (for example 10 or 15 years from the date the pension income started).

 

Commuted Value

The amount of money that represents your pension benefit that could be transferred in a lump-sum, in most cases, to a locked-in retirement account. If you are not going to immediately start drawing income from the plan and you do not take the commuted value, you will be leaving your pension to a later date as a Deferred Pension.

 

Bridge Benefits or Temporary Annuity

These are used to provide short-term higher payments until other benefits start, such as Canada Pension Plan (CPP) or Old Age Security (OAS) and they help to smooth out the income stream by integrating payment from your pension and government benefits.