Supplementary death benefit plan
What is the amount of my Supplementary death benefit coverage? Who can I name as my beneficiary?
Find the answer to this question and many others on the video below, including how the Supplementary death benefit is calculated and how you can change your beneficiary at anytime. Click on the links below for additional information on this topic.
Transcript of the Supplementary death benefit plan
The Supplementary death benefit is a form of decreasing term life insurance. Participation is mandatory for the majority of active members of the public service pension plan.
The benefit payable to your beneficiary is equal to twice your final pensionable salary, rounded up to the next $1,000.00. The cost is 15 cents per month for every $1,000 of coverage.
As an active plan member, if your salary increases or decreases, your coverage and cost will be adjusted accordingly. Once you retire, the coverage will be based on the salary received on your last day of employment.
The benefit payable at the time of your death is tax free.
If you retire with an entitlement to an immediate continuing pension that is payable within 30 days of terminating your employment, your Supplementary death benefit coverage will continue automatically at the same premium rate as when you were employed.
At age 65, the first $10,000.00 of coverage is free. The benefit and the premium you pay are reduced by 10% per year starting at age 66. As an active member of the public service pension plan, your SDB will never reduce below 33% of your annual salary (rounded up to the nearest $1,000) or below $10,000, whichever is greater. The benefit amount never goes below $10,000.00.
After you retire, you may cancel your coverage or reduce it to $10,000.00 but once you make this decision, it is irrevocable and you will not be able to restore your coverage at a later date.
If you are not entitled to the automatic coverage after retirement, you may choose to continue the coverage at commercial rates. The deadline to apply for this coverage is 30 days after terminating your employment. Commercial rate coverage reduces by 10% per year in the same manner as it does for regular coverage, but the $10,000 minimum coverage does not apply—Coverage reduces to zero at age 75.
Naming a beneficiary
You can designate a beneficiary of your Supplementary death benefit. A beneficiary may be your estate, a person age 18 or over at the time of designation, or a charitable, benevolent, religious or educational institution. You should note that only one person age 18 and over can be designated. If you wish to name more than one beneficiary, you may choose to name your estate as your supplementary death benefit beneficiary and then specify in your will how the benefit should be distributed.
You can change your beneficiary at anytime and as often as you need. The last valid designation form signed and received by the Government of Canada Pension Centre before you pass away will be the form used to make the death benefit payment. Even in the event of divorce, a designation remains valid if unchanged.
The provisions of a will, separation agreement or court order will not have any effect on the entitlement to the Supplementary death benefit. The payment will be made to the designated beneficiary.
If you wish to obtain a designation form or if you are unsure who you designated as a beneficiary, you should contact the Government of Canada Pension Centre. The designation form can also be found on Pension and benefits web portal.
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View the Supplementary death benefit video.