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Public Service Management Insurance Plan - Changes to Designated Beneficiaries

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April 2, 2008

To: Chief of Compensation
Other Federal Sector Employers participating in the PSMIP.

1. Introduction

The purpose of this notice is to clarify the designation of beneficiary policy under the Public Service Management Insurance Plan (PSMIP) and to provide notice of upcoming changes to the relevant forms.

2. Background

When applying for PSMIP or Post Retirement Life Insurance (PRLIP) coverage, members may designate a beneficiary and specify on the application form whether the designation is revocable or irrevocable.

Subject to the policy described below, members may also change a designated beneficiary by completing a Change of Beneficiary Card, PWGSC 2028-1 or PWGSC 2451-1.

3. Designation of Beneficiary Policy

A member may change his beneficiary subject to any applicable laws to the contrary by completing a "Change of Beneficiary" card PWGSC-TPSGC 2028-1 or PWGSC-TPSGC 2451-1.

In all provinces and territories, where a member specifies that a designation is revocable, no consent is required to subsequently amend the named beneficiary.

In all provinces and territories, where a member specifies that a designation is irrevocable, it cannot be changed unless the previous beneficiary consents to the naming of a new beneficiary.

Where a plan member does not specify whether the designation is revocable or irrevocable, the designation is automatically considered revocable, with one exception. In Québec, if a plan member does not specify, the designation of a legal spouse is automatically considered irrevocable.

Plan members should be advised that since October 29, 1976, in the province of Quebec, the naming of a legal spouse automatically results in the designation being irrevocable, UNLESS the insured indicates on the form that the appointment is "revocable". Any other choice of beneficiary is revocable.

In all other provinces and territories, designations are revocable UNLESS the insured indicates that it is "irrevocable".

4. Procedure

Plan members should be aware of the impact of this policy, especially with respect to the irrevocable nature of certain designations. Members should also ensure that their designated beneficiary for PSMIP and PRLIP benefits is up to date.

Upon receipt of a request for change of beneficiary, Compensation Offices and the Superannuation Pension Transition and Client Services Sector (SPTCSS), PWGSC, should check the plan member's initial application card if it is a first request for change, or any subsequent designation cards, to determine whether consent of a previous beneficiary is required.

Cases should be referred to the SPTCSS, PWGSC in the following circumstances:

  • where a change of beneficiary was inadvertently accepted without obtaining proper consent from a previous designated beneficiary;
  • death claims where a previously designated beneficiary comes forward with a claim.

5. Other designation issues

  1. Plan members who change from employee-paid coverage to employer-paid coverage still maintain their initial designation unless they subsequently changed it subject to the above-noted policy.
    • For Example:
      A main plan member has made an irrevocable designation and subsequently becomes subject to the Executive employer-paid plan. The initial designation is still valid and cannot be changed without the consent of the previous beneficiary since "irrevocable" was checked off on the form.
  2. If no beneficiary is named, or if the beneficiary predeceases the plan member, the benefits are payable to the estate.

6. Forms & Insurance Administration Manual

PWGSC Forms 2028, 2028-1, 2451 and 2451-1 will be updated to help clarify for members the rules regarding a designation of beneficiary where consent is required. In the meantime, continue using the existing forms. The Insurance Administration Manual will also be updated to clarify the process.

7. Enquiries

Employees with questions about any aspect of their coverage under the PSMIP should contact their Compensation Officer.

Chiefs of Compensation at the corporate level may call Robert Allard 613-952-5118.

Phil Charko
Assistant Secretary
Pensions and Benefits Sector

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