Survivor Rights – Prescribed Retirement Savings Plan

OSFI has recently received questions regarding a survivor's ability to surrender a death benefit payable from a prescribed retirement savings plan. We would like to clarify that subsection 23(5) of the PBSA is in respect of the surrender of a pre-retirement death benefit paid from a pension plan. If a member or former member has exercised portability and transferred their pension benefit credit to a prescribed retirement savings plan then we look to provisions in the PBSR.

Sections 20(1)(b), 20.1(1)(i), 20.2(1)(b) and 20.3(1)(i) of the PBSR provide that on the death of the holder, the funds in a prescribed retirement savings vehicle shall be paid to the survivor of the holder. There is no provision in the PBSR that allows for a survivor to surrender their entitlement following the death of the holder. Sections 20.(1)(c), 20.1(1)(j), 20.2(1)(c) and 20.3(1)(j) outline that except as provided in subsection 25(4) of the PBSA, the funds in a prescribed retirement savings plan shall not be assigned, charged, anticipated or given as security and that any transaction purporting to assign, charge, anticipate or given the funds as security is void. Section 36 of the PBSA also outlines instances where an agreement or arrangement to surrender or commute benefits payable as a result of a portability transfer is void.