Office of the Superintendent - Pension Commission

OSPC - FAQS - Overview of Manitoba Pension Laws

Life Annuities

1. What is a life annuity?

   This is a pension offered by a life insurance company. The insurer guarantees payment of a pension for a person's lifetime. Different survivor benefits and guarantees come with different kinds of annuities. The cost of an annuity is set by the insurer.

   The payments under a life annuity are guaranteed, regardless of how the financial markets perform, or what interest rates are. When you buy a life annuity, the risk of fluctuations in investment markets and interest rates is transferred to the insurance company.

2. Must my life annuity have survivor benefits?

   If you have a spouse or common-law partner when you retire, your life annuity must have survivor benefits. Survivor benefits give your surviving spouse or common-law partner a lifetime pension of at least 60 percent of the pension being paid to you.

   When you have survivor benefits, the amount payable at retirement may be reduced to ensure that continuing payments can be made throughout your lifetime (and your spouse's or common-law partner's lifetime).

   A person may receive a pension that does not offer a survivor benefit, only if the spouse or common-law partner, after being given the necessary information, waives his or her right to the benefit by signing Form 5A - Waiver of 60% Joint Pension Entitlement for Pension Plan or Locked-in Retirement Account that you give to the administrator of the pension plan.

3. Can I change/revoke the waiver?

   A spouse or common-law partner may change or revoke the waiver at any time before the pension payments start by filing a written revocation with the pension plan administrator.

4. What will my monthly income be?

   If an amount is being transferred:

   • from a pension plan, which is a defined contribution benefit or
   • from a Locked in Retirement Account

   the amount of your monthly income will vary, depending on the amount transferred and the option you chose.

5. Can my pension be reduced when I start receiving Old Age Security (OAS) payments or Canada Pension Plan (CPP) payments?

   Some plans offer an optional form of pension, called an "integrated pension." If you choose this option at retirement, you will receive an additional benefit in the form of higher pension payments from the plan until you start receiving OAS and CPP payments. This helps you maintain a level income. Once you start receiving OAS and CPP payments, you will not receive this additional benefit and your pension will be reduced.

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