When a Death Occurs

What is the benefit payable for death before retirement?

There are two possible situations.

Situation 1: The employee has a spouse at the time of death.

A lump-sum death benefit is payable to the spouse. A lump-sum benefit is payable in a single amount. This benefit is taxable. Depending on the amount payable, taxes are deducted at source. However, the spouse may ask for the benefit to be transferred into a registered retirement saving plan (RRSP); in this case, taxes are deducted from the transfer.

If the employee dies after his or her 65^th birthday, special conditions apply.

Situation 2: The employee does not have a spouse at the time of death or the spouse had renounced the benefit payable before the employee’s death.

A lump-sum death benefit is then payable to the designated beneficiary(ies) in a single payment. If the employee did not designate a beneficiary or beneficiaries, the lump-sum death benefit is payable to the employee’s heirs. Since the death benefit is taxable, taxes are deducted at source. Transfer to an RRSP is not permitted.

Particular conditions, limitations, or exclusions other than those mentioned above may apply to the payment of certain benefits; only the Règlement sur les régimes complémentaires d'avantages sociaux dans l'industrie de la construction, published by the Éditeur officiel du Québec, has official and legal force.Nevertheless, the provisions that apply to a specific event are those in force at the time of this event.

Situation 1 – The retiree is partially retired

In partial retirement, the retiree receives a pension from the General Account, but not from the Complementary Account.

If the retiree has a spouse and if the survivor option is in effect for the pension from the General Account

• If the retiree dies before the end of the guarantee period, the spouse receives 100% of the pension the retiree was receiving from the General Account for the remaining 120 or 180 guaranteed payments, depending on the option the retiree chose at retirement.
  When the guaranteed period ends, the spouse receives 60% of the retiree’s pension from the General Account. If the value of the pension payable to the spouse from the General Account is lower than the limit set by the Supplemental Pension Plans Act, an amount equal to that value will be paid to the spouse in a lump sum instead of as a monthly pension.

• In addition, an amount equal to the value of the employee’s Complementary Account will be paid to the spouse in a lump sum.

The pension paid to the spouse is taxable.

A lump-sum payment is taxable; taxes will be deducted at source. However, the spouse may request that the payment be transferred to a registered retirement savings plan (RRSP); no income taxes will be deducted from the amount transferred.

Example:

Peter received 24 payments of $1,000 a month from the General Account before he died. His spouse will receive:

• a lump-sum payment equal to the value of Peter’s Complementary Account;
• 36 payments of $1,000 per month (which is 100% of the increased pension Peter would have received from age 62 to 65);
• 60 payments of $300 per month (which is 100% of the reduced pension Peter would have received after age 65 for the balance of the 120 guaranteed payments).
• payments of $180 per month until her death (which is 60% of the reduced pension of $300 a month) because all the payments in the guarantee period were completed (that is, 24 + 36 + 60 = 120).

If the retiree has a spouse and if the pension without a survivor benefit option is in effect for the General Account

• If there is still a pension amount payable from the General Account, a lump-sum benefit is paid to the designated beneficiary(ies) or, if there is no beneficiary, to the retiree’s estate.
• An amount equal to the value of the employee’s Complementary Account is payable in a lump-sum to the spouse.

A lump-sum payment is taxable; taxes will be deducted at source. However, the spouse may request that the payment be transferred to a registered retirement savings plan (RRSP); no income taxes will be deducted from the amount transferred.

If the retiree does not have a spouse

• If there is still a pension amount payable from the General Account, a lump-sum benefit is paid to the designated beneficiary(ies) or, if there is no beneficiary, to the retiree’s estate.
• In addition, an amount equal to the value of the employee’s Complementary Account is payable in a lump-sum to the designated beneficiary(ies) or, if there is no beneficiary, to the retiree’s estate.

A lump-sum payment is taxable; taxes will be deducted at source.

Situation 2 – The retiree is fully retired

When fully retired, the retiree receives all pension entitlements.

If the retiree has a spouse and the survivor option is in effect

The spouse is entitled to a pension. This pension is taxable.

• If the retiree dies before the end of the guarantee period, the spouse receives 100% of the pension the retiree was receiving for the remaining 120 or 180 guaranteed payments, depending on the option the employee chose at retirement.
• When the guaranteed period ends, the spouse receives 60% of the retiree’s pension.

Note: If the employee retired before December 1, 2013, the pension options offered were different. The employee could choose either a 50% or 60% survivor pension and the guarantee period was 5 years (60 payments) or 10 years (120 payments).

If the value of the pension payable to the spouse is lower than the limit set by the Supplemental Pension Plans Act, an amount equal to that value will be paid to the spouse in a lump sum instead of as a monthly pension. A lump-sum payment is taxable; taxes will be deducted at source. However, the spouse may request that the payment be transferred to a registered retirement savings plan (RRSP); no income taxes will be deducted from the amount transferred.

Example 1: 

Paul had been retired for 24 months when he died at the age of 62. He had chosen a pension that was increased to $2,000 per month, then reduced to $1,300 per month at age 65, with a 10-year guarantee period (120 payments) and a 60% survivor option.

Paul received 24 payments of $2,000 a month before he died. His spouse Lucy will receive:

• 36 payments of $2,000 a month (which is 100% of the increased pension Paul would have received from age 62 to 65);
• 60 payments of $1,300 a month (which is 100% of the reduced pension Paul would have received after age 65 for the balance of the 120 guaranteed payments).
• payments of $780 per month until her death (which is 60% of the reduced pension of $1,300) because all the payments in the guarantee period were completed (that is, 24 + 36 + 60 = 120).

Example 2: 

Philip took partial retirement on January 1, 2018; his pension from the General Account was a level pension of $1,000 per month, with a 10-year guarantee (120 payments) and a 60% survivor option.

Philip will take full retirement on February 1, 2023; his pension from the Complementary Account will be a level pension of $1,800 per month, with the required 10-year guarantee (120 payments) and a 60% survivor option.

If Phillip were to die on December 15, 2025, he will have received:

• 61 payments, from January 1, 2018 to January 1, 2023, from his pension from the General Account of $1,000 a month;
• 35 payments, from February 1, 2023 to December 1, 2025, of $2,800 a month, which was his $1,000 pension from the General Account plus his $1,800 pension from the Complementary Account.

After Phillip's death, his spouse will receive:

• 24 payments, from January 1, 2026 to December 1, 2027, of $2,800 a month (which is 100% of Philip’s $1,000 pension from the General Account plus 100% of his $1,800 pension from the Complementary Account);
  The number of guaranteed payments from the General Account will then be complete (61 + 35 + 24 = 120);
• 61 payments, from January 1, 2028 to January 1, 2033, of $2,400 a month (which is 60% of Philip’s $1,000 pension from the General Account (i.e.- $600) plus 100% of his $1,800 pension from the Complementary Account);
  The number of guaranteed payments from the Complementary Account will then be complete (35 + 24 + 61 = 120);
• From February 1, 2033 until her death, payments of $1,680 a month (which is 60% of the $1,000 pension from the General Account and the $1,800 pension from the Complementary Account).

If the retiree has a spouse and if the pension without a survivor benefit option is in effect

If there is still a pension amount payable from the pension plan, it will be paid to the designated beneficiary(ies) or, if there is no beneficiary, to the retiree’s estate. The benefit amount is taxable; taxes will be deducted at source.

The spouse, if there is one, will not receive a pension.

Example: 

Michael received 24 payments of $2,000 per month before he died. The guarantee covers:

• 36 payments of $2,000 (which is 100% of the increased pension Michael would have received between the ages of 62 and 65);
• 60 payments of $1,300 (which is 100% of the pension Michael would have received after age 65 for the balance of the 120 guaranteed payments).

Martine and Mark, the beneficiaries designated by Michael, will receive, in equal shares, an amount equal to the value of these 96 payments.

If the retiree does not have a spouse

If there is still an amount payable from the pension plan, it will be paid to the designated beneficiary(ies) or, if there is no beneficiary, to the retiree’s estate. The benefit amount is taxable; taxes will be deducted at source.

Who is considered a spouse for the purpose of the pension plan?

For the purposes of the pension plan, a spouse is a person who meets one of the following conditions:

• Is married to or in a civil union with a plan employee or retiree

OR

• Has been living in a conjugal relationship with a plan member who is not in a marriage or civil union, whether they are of different sexes or the same sex, for at least three years, or, in the following cases, for at least one year:
  • At least one child has been born from their union;
  • They have jointly adopted at least one child during their conjugal relationship;
  • One of them has adopted at least one child who is the child of the other during this period
  • They have in the past been spouses in the sense of the present section;

The birth or adoption of a child before the current conjugal relationship began on the day that the quality of spouse was established may qualify a person as spouse.

The quality of spouse is established on the day when payment of the pension to the participant begins or on the day preceding the participant’s death, whichever comes first.

If the spouse has been identified on the day when payment of the pension begins : if the spouse has died or has lost the right to receive death benefits (for example, following a divorce), the quality of the new spouse is established on the day preceding the participant’s death.

In order to comply with the Act Respecting Prescription Drug Insurance, the definition of spouse used by the insurance plan is different from the one given above for retirement.

Particular conditions, limitations, or exclusions other than those mentioned above may apply to the payment of certain benefits; only the Règlement sur les régimes complémentaires d'avantages sociaux dans l'industrie de la construction, published by the Éditeur officiel du Québec, has official and legal force.Nevertheless, the provisions that apply to a specific event are those in force at the time of this event.

What happens upon the death of a spouse who was receiving a pension dies?

When a spouse who was receiving a pension from the construction industry pension plan dies, the CCQ determines whether an amount payable remains. If it does, a lump-sum death benefit is paid to the spouse's estate. A lump-sum benefit is payable in a single amount.

Beneficiaries must notify the CCQ Customer Services of the death as quickly as possible. They will then receive the information and documents needed to help them file for the benefit.

Particular conditions, limitations, or exclusions other than those mentioned above may apply to the payment of certain benefits; only the Règlement sur les régimes complémentaires d'avantages sociaux dans l'industrie de la construction, published by the Éditeur officiel du Québec, has official and legal force.Nevertheless, the provisions that apply to a specific event are those in force at the time of this event.