When do I need a beneficiary?

There are two occasions when you will be asked to name a beneficiary for your account:

  1. when you join SPP; and
  2. when you select the refund life annuity at retirement.

You may name either a person(s) or your estate as beneficiary. Your beneficiary can be changed at any time by notifying SPP in writing.

Who can you pick as a beneficiary?

There are several factors to consider when naming a beneficiary.

Withholding taxes for your beneficiary?

Withholding tax is determined using a schedule prescribed by Canada Revenue Agency (CRA).

Account Balance Rate of Tax Withheld
$5,000 or less 10%
$5,001 - $15,000 20%
$15,001 and over 30%

For example, if your account balance is $5,500 when you die and your beneficiary chooses to receive the payment directly, he or she will receive $4,400, and $1,100 of withholding tax will be sent to CRA. The beneficiary will receive a T4A to file with his or her income tax return and may be eligible for a refund of all or part of the tax paid.

Beneficiary examples

Where one beneficiary is named: Mary Jane Smith, my wife
Where more than one beneficiary is named: Sarah Louise Smith, my mother and Robert Gordon Smith, my father, equally or to the survivor.
Where beneficiaries are allowed fractional amount(s): Mary Jane Smith, my wife, two-thirds; William John Smith, my son, one-third. The share of a deceased beneficiary shall be paid to the survivor.
Where an alternative beneficiary is named: Mary Jane Smith, my wife, if living, otherwise to William John Smith, my son.
Where an minor is named as beneficiary: Mary Jane Smith in trust for William John Smith, my son.

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