Infosheet No. 6
Benefit Changes Upon Marriage, Common Law Relationships or Acquiring Dependents
Introduction
Upon getting married, entering into a common law relationship including same-sex relationships, or acquiring dependents, members should be aware of a number of items which they must action in order to put their benefit house in order. Too often we incorrectly assume that matters are automatically taken care of for us. However, it is the member who must initiate certain necessary changes in benefit coverage in order to ensure the smooth transition of documentation from single to family status. The purpose of this Infosheet is to assist members in making changes in the Association’s benefit program which reflect the new dependent or family status, and to give a step-by-step overview of the most important changes required to maintain appropriate benefit levels under the member’s new status.
Payroll/Pension Benefit Changes
Any active member whose dependent or family status changes must, as soon as possible, inform Teacher Payroll of the event and date of its happening. An active member who marries, for example, must inform Teacher Payroll of the date of the marriage. An active member who acquires a dependent, i.e. single parent, must also make that information known to Teacher Payroll. For any retired member whose dependent or family status changes, they must inform the Teachers’ Pension Plan Corporation as soon as possible of the event and date of change. Members without a spouse or children, but with individuals who are financially dependent on them, should contact the Teachers’ Pension Plan Corporation re the possibility of designating a beneficiary.
Death Benefits
(a) Before Retirement (at least 5 years of pensionable service)
In the event of pre-retirement death of a member, the surviving spouse/partner is called the principal beneficiary and has the option to receive: (1) a monthly survivor pension equal to 60 percent of the member’s accrued pension after integration with CPP and payable until the surviving spouse’s death; or (2) a lump sum payout based on commuted value of the pension. The surviving spouse/partner should consult a financial planner prior to exercising this option.
Where there is no surviving spouse/partner (principal beneficiary) entitled to a survivor benefit, the commuted value of the pension entitlement of the member, calculated at the date of death, shall be transferred to the member’s estate.
(b) After Retirement
If a pensioner dies, leaving a surviving spouse or partner, a survivor pension equal to 60 percent of the member’s actual pension, after integration with CPP if applicable, is payable to the surviving spouse until the surviving spouse/partner’s death.
In the event of no surviving spouse or the death of the surviving spouse, the survivor benefit shall be paid to any surviving children under the age of 18, or under the age of 24 while they are in full-time post-secondary school attendance.
In the case of a pensioner who dies leaving no surviving spouse or dependant(s), pension payments cease. If the amount which the pensioner has received in benefits is less than the total amount of contributions paid, the difference is paid to the estate of the deceased in accordance with the Teachers’ Pensions Act.
(c) Designated Beneficiary
In the case of a member who does not have a designated beneficiary (no spouse/partner or child entitled to a survivor benefit), the member may designate a beneficiary under limited conditions, including the designate, being financially dependent upon the member and unable to support themselves due to mental or physical infirmity.
It is important for members to fill out the Teachers’ Pension Plan Corporation Designated Beneficiary form to ensure that pension benefits are directed according to the member’s wishes. If an active member dies, benefits normally go to the surviving spouse/partner and if there is no surviving spouse/partner to dependent children. If there is commuted value remaining on the pension, the member may also wish to direct where that benefit goes, which could include people or charities. These are important decisions for all members. If you have any questions or concerns, please contact the Teachers’ Pension Plan Corporation (TPPC) at www.tppcnl.ca; or at 793-8772 or 1-833-345-8772 (toll free).
Group Life Insurance
Under the current Group Insurance Program, a member is automatically enrolled for family coverage:
Basic Life (2 x salary); Dependent Life; Basic AD&D (2 x salary); Health (family coverage); Dental (family coverage); Long-Term Disability (under 60); Basic Critical Illness.
If a member requires single coverage only, they must contact Johnson Inc., Plan Administrator, to change from family to single coverage. (If a member is paying family coverage and has no dependents, then the member is paying the incorrect premium.)
Life Style Change (e.g. married, birth of child, common-law partner, etc.)
a) If a member marries or upon the birth of a child, the member should contact Johnson Inc. within 31 days of the lifestyle change. Beyond 31 days, applications will require evidence of medical insurability and approval is determined by the underwriters.
b) If not legally married, but cohabit in a conjugal relationship for a minimum of 12 continuous months, a member must contact Johnson Inc., within 31 days of the end of the 12th month period in order to obtain coverage for a member’s partner. Otherwise, application providing satisfactory medical evidence of insurability will be required and approval must be granted by the underwriter.
Group Insurance Designated Beneficiary
All members should designate a beneficiary(ies) for all life insurance policies. To do so, a member must contact Johnson Inc. for the appropriate forms. Members may wish to consider changing their designated beneficiary(ies) based upon lifestyle changes, e.g. married, divorced, remarried, additional dependents, etc. Insurance benefits can be released relatively quickly to the named beneficiaries upon proof of death. If the beneficiary is named in a member’s will, monies to the estate cannot be released until the will is probated. The latter may take a considerable period of time depending on the complication of the will and the family circumstances. This, then, would entail unnecessary financial hardship for loved ones left behind without ready income.
Contingent beneficiaries, i.e. those to whom the insurance benefit would be payable to in the event that a primary beneficiary is deceased prior to the insured member, can be named by completing the appropriate beneficiary form available from the Plan Administrator, Johnson Inc., 10 Factory Lane, St. John’s, NL A1C 6H5; Tel: 709-737-1528 or 1-800-563-1528; Fax: 709-737-1021; www.johnson.ca/nlta. For members with dependents who are children, trustees should be named in the will for beneficiaries under the age of 18.
Note: If you and your spouse are both members, it is your responsibility to check your pay stubs and decide (ASAP) whether both of you wish to pay family premiums. Premiums will not be refunded retroactively beyond the current insurance year in which Johnson Inc. was informed of the change in status. Each year all members of the Group Insurance Program receive a Group Insurance Benefit Statement from Johnson Inc. It is the member’s responsibility to ensure that the coverage, benefits and beneficiary designation are correct. The computer system cannot identify two people as spouses and will therefore deduct all insurance options based on your new status, unless you specifically provide directions to Johnson Inc. concerning your wishes.
Conclusion
When a member acquires a dependent, the onus of responsibility is on the member to contact TPPC, Teacher Payroll, and the Group Insurance Plan Administrator, Johnson Inc., to make the necessary or desired changes.
Note: In the event of a discrepancy between this Infosheet and the Group Master Policy, the terms of the Group Master Policy will apply.
This Infosheet is one of a series which are updated periodically and which provide information of a general nature only. Documents such as Collective Agreements, legislation and policies referenced in Infosheets will govern the specific rights and benefits of members. For further information, please contact: Programs and Services, NLTA Office, 3 Kenmount Road, St. John’s, NL A1B 1W1. Telephone: 726-3223 or 1-800-563-3599 (toll free) • mail@nlta.nl.ca • www.nlta.nl.ca
