Supplementary Death Benefit—Canadian Armed Forces pensions
This page provides information about the Supplementary Death Benefit (SDB) plan which is a form of term reducing life insurance. This plan is specific to the following audiences:
- Regular Force members who enrolled before March 1, 2007
- Regular Force members who enrolled on or after March 1, 2007
- Members of the Reserve Force on Class "C" service
- Active members who contribute to the Supplementary Death Benefit (SDB) plan
You may want to know
Who participates in the Supplementary Death Benefit plan?
Regular Force members and Class "C" Reserve members who are serving or receiving a pension are eligible to participate in the Supplementary Death Benefit (SDB) plan.
How does the plan work?
While you are serving
If you die while serving, your beneficiary receives two times your annual pay, rounded up to the nearest $250, if that amount is not a multiple of $250. You pay $1 for every $10,000 of coverage.
If you release with an immediate pension and have at least five years of Regular Force or Class "C" service, you automatically continue your coverage under the plan. You have nothing to do; contributions will be automatically deducted from your pension payments. The cost after retirement is the same as before. You pay $1 for every $10,000 of coverage.
The benefit remains at two times your annual pay at release until age 61. After age 61, the benefit starts to reduce by 10% of the original amount, each year, until age 70. At age 70, you receive paid-up coverage of $5,000 for your lifetime, at no further cost to you.
If you are not entitled to an immediate pension at release, but have at least five years of Regular Force or Class "C" service, you may choose to continue your coverage. The benefit remains at two times your annual pay at release, until age 61. After age 61, the benefit starts to reduce by 10% of the original amount, each year, until age 70, when coverage ends. If you choose to continue your coverage, you pay the full cost of the coverage and costs will vary depending on your age at release. The deadline to elect to continue as a participant is 30 days after releasing.
Who can I designate as my beneficiary?
You may designate one of the following as your beneficiary:
- any person who is age 18 or more at the time you make the designation
- your estate;
- any registered charitable or benevolent organization or institution or
- any educational or religious organization, or institution that is supported by donations
How do I designate a beneficiary?
To designate a beneficiary, you must complete the Naming or Substitution of a Beneficiary form. You can only designate one beneficiary on the form. If you wish to designate more than one beneficiary, designate your estate on the form, and then set out your beneficiaries in your Will.
Reserve Force members who are on Class "C" service must complete a new Naming or Substitution of a Beneficiary form on the commencement of each period of Class "C" service, as the previous form will no longer be valid.
Your witness cannot be your beneficiary. Once complete, mail the "Naming or Substitution of a Beneficiary" form to the Government of Canada pension centre.
In the absence of a named beneficiary, the benefit is paid to your estate.
To change your beneficiary, you must submit a new designation form. In the event of divorce or separation, a beneficiary designation remains valid if left unchanged. The provisions of Wills, agreements or court orders do not determine the person to whom the SDB benefit is payable.
Does my beneficiary pay income tax on the benefit?
Funds that are paid directly to your beneficiary are not taxable. Funds that go to the estate may be taxed.
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