If I die before I retire or quit teaching, what happens to my pension?

Sandra Marcellus

If a teacher dies while under contract, different rules apply if the teacher dies before—as opposed to after—he or she is entitled to a pension.

Teachers are eligible for pension (i.e., vested) when they have

  • five years of pensionable service after August 31, 1992, or
  • five years of pensionable service that includes a period of pensionable service in each of the 1991/92 and 1992/93 school years, or
  • ten years of pensionable service.

Sandra Marcellus

Pensions are not payable until age 55.

For teachers who are vested, the Teachers’ Pension Plan Act sets out who receives the death benefit and the amount of the benefit. If the teacher dies while under contract and has a spouse/pension partner, that spouse/pension partner receives a pension for life from the month after the death of the teacher.

The pension is based on the years of service and average salary of the teacher at the time of death. There is no reduction for early retirement, although the pension may be reduced if necessary to comply with tax rule maximums.

If the teacher does not have a spouse/pension partner but has dependent children under age 18, the children will receive two times the teacher’s contributions plus interest.

If the teacher has no spouse/pension partner and no dependent children under age 18 at the time of death, the beneficiary(ies), as determined by the beneficiary form on file with the Alberta Teachers’ Retirement Fund (ATRF), will receive the teacher’s contributions with interest.

If there is no spouse/pension partner, no dependent children under age 18 and no designated beneficiary, contributions plus interest will be paid to the teacher’s estate and could be subject to fees or claims.

If a teacher dies before being eligible for a pension (i.e., not vested), the rules for who receives the benefit are the same, but the benefit amount is the teacher’s contributions with interest.

Teachers should, therefore, regularly review the beneficiary information reported on their ATRF Plan Member Statement and update it with ATRF. Since spouses/pension partners are automatically entitled to the death benefit under the Teachers’ Pension Plan Act, teachers should name someone else as beneficiary. That beneficiary receives the death benefit only if there is no surviving spouse/pension partner and no dependent children under age 18. Teachers can name more than one beneficiary and can name a charity as their beneficiary.

More information on death benefits is available in the “Life Events in the Teachers” section of the ATRF website. Beneficiary forms are also available on the website.

For more information, contact Sandra Marcellus at Barnett House at (780) 447-9403 (in Edmonton) or 1-800-232-7208 (from elsewhere in Alberta).