Designating or updating your beneficiaries: an important step
You’re working hard to save for retirement. But if something were to happen to you, do you know who would receive the money you’ve saved in your group retirement savings plans? You may have already named one or more beneficiaries, or you may have put off this step until later.
However, beneficiary designation is an integral part of your financial planning. A few minutes are all it takes to ensure that your savings will be passed down according to your wishes upon your death and to help avoid certain complications for your loved ones.
What is a beneficiary?
A beneficiary is a person or entity that you select to receive the money you have saved in your group retirement savings plans after your death. If you designate multiple beneficiaries, you can specify the portion of your savings that you wish to allocate to each person or entity. Please note that the rules differ from one province to another.
Who can you designate as beneficiaries?
Depending on your situation and the rules that apply in your province, you may designate various people or entities, including:
- Your spouse
- One or more children1
- Any other person of your choice
- A trust, organization or other eligible entity, depending on the circumstances
Why is it important to designate your beneficiaries?
By designating one or more beneficiaries, you can:
- Choose the people or entities who will receive your retirement savings upon your death
- Ensure that your savings will be passed down according to your wishes
- Make things easier for your loved ones
- Prevent certain legal issues related to the transfer of your savings
- Take advantage of tax transfers available to eligible spouses, when your plan type allows
On the other hand, if you don’t designate beneficiaries for your group retirement savings plans, your savings may be paid to your estate or used to pay off your debts, depending on the applicable rules. This could therefore result in additional steps for your loved ones.
Revocable or irrevocable: What’s the difference?
When you designate your beneficiaries, you may have to choose between a revocable or irrevocable designation.
- Revocable designation
You can generally modify or replace a revocable designation without obtaining the beneficiary’s consent. Depending on the terms of your plan, you may also be able to make certain transactions without their consent. - Irrevocable designation
You must generally obtain the irrevocable beneficiary’s written consent in order to modify or revoke their designation. Their consent may also be required to make certain transactions.
An irrevocable designation generally provides less flexibility than a revocable designation. Before making this choice, be sure you understand the consequences and carefully evaluate how it will affect your situation.
When should you review your beneficiary designation?
Even if you have already designated your beneficiaries, we recommend that you review your designation whenever a major life event occurs that could affect your choices. A designation that was appropriate several years ago may not necessarily reflect your current situation.
A few examples of life events:
- A marriage or the start of a common-law relationship
- A separation, divorce or the end of a common-law relationship
- The birth or adoption of a child
- The death of a spouse or a dependent
- A significant change in your family or estate situation
How do you designate or update your beneficiaries?
1. Sign in to My Client Space.
2. Under Group savings and retirement, click on Dashboard.
3. In the left-hand menu, select the plan2 for which you wish to designate or update your beneficiaries.
4. Click on Beneficiaries.
5. Follow the steps.
You can also conveniently use the iA Mobile app to designate or update your beneficiaries. If you have not yet already done so, you can download it and sign in using your username and password for My Client Space. Once in the app, under the Plans tab at the bottom of the screen, simply click on Beneficiaries and follow the steps.
Your savings is part of your estate
Your retirement savings is an important part of your estate. You should therefore consider beneficiary designation in the same way as other aspects of your financial and estate planning.
Depending on your situation, think about meeting with a certified financial planner before designating or changing your beneficiaries for your group retirement savings plans.
Designating or updating your beneficiaries is an important step that provides peace of mind and helps protect your savings.
1 If you are designating minor beneficiaries, it is important to designate a trustee, except in Quebec. In Quebec, if a minor child is named as beneficiary, the minor child’s parent or legal guardian will administer the amounts upon the death of the plan member until the minor child reaches the age of majority.
2 Note that you must designate beneficiaries for each plan in which you participate.