Common use of Life Annuity Clause in Contracts

Life Annuity. In addition to the rules imposed by the Income Tax Act, a life annuity purchased with the property of the Plan must comply with Pension Legislation and must be established for the Annuitant’s life. However, if the Annuitant has a Spouse on the date payments under the life annuity begin, the life annuity must be established for the lives jointly of the Annuitant and the Annuitant’s Spouse, unless the Annuitant and the Spouse has provided a waiver in the form and manner required by Pension Legislation. Where the surviving Spouse is entitled to payments under the life annuity after the Annuitant’s death, those payments must be at least 60 percent of the amount to which the Annuitant was entitled prior to the Annuitant’s death. The life annuity may not differentiate based on gender except to the extent permitted by Pension Legislation. The life annuity may not commence before the earlier of: (a) the earliest date on which the former member is entitled to receive pension benefits under Pension Legislation as a result of termination of employment or termination of membership in any pension plan from which the money was transferred into the LIRA; and (b) the earliest date on which the former member is entitled to receive pension benefits under any pension plan described in clause (a) as a result of termination of employment or termination of membership in the plan.