Annuities

Annuity fund calculation
Annuity fund statement
Annuity payment
Dependents
More information

As an injured worker, if you receive loss of earnings benefits for the same injury for at least 24 months, we establish an annuity fund for you. We set aside, into the annuity fund, an amount equal to 10 per cent of the total amount of loss of earnings paid to you, plus interest. You are eligible to receive the annuity at the later of the age you became entitled to apply for benefits under the Old Age Security Act (currently age 65) and the date that loss of earnings benefits ceases to be payable to you.

Note that the 24 months don’t have to be consecutive.

Annuity fund calculation

The amount we set aside is in addition to the amount you receive in loss of earnings benefits. In other words, the amount set aside is not deducted from your benefits, but is on top of benefits paid to you.

The annuity accrues interest over time. The interest rate used is the 10 year Government of Canada bond rate, which is reset annually on the first business day of the year.

Annuity fund statement

To see how much is in your annuity fund, check your annual statement. We calculate the figures annually (from January 1 to December 31) and send out the statements by April 30 of the following year.

Your annual statement shows the principal and the interest accumulated. An accompanying letter from us identifies the person you named as your dependent (see below) and who to contact if you’d like to make a change.

Be sure to contact us if you change your address.

Annuity payment

We release funds to you on the later of the date you become eligible to apply for benefits under the Old Age Security Act, and the date loss of earnings benefits ceases to be payable to you.

This is usually within the month after your 65th birthday.

How we release the funds depends upon the amount. If the funds accumulated are:

equal to or less than $50,000, we provide these funds to you in a lump sum payment;
greater than $50,000, you must purchase an annuity from an investment organization of your choice. There is no restriction on the term on the annuity you purchase. We pay the funds directly to your chosen investment organization.

You cannot access annuity funds earlier, even if you take early retirement.

If you receive your annuity fund payout as a lump sum, you will be issued a T5007 slip. These payments are generally not taxed; however, you must report your benefits to the Canada Revenue Agency as it may affect other benefits that you may be entitled to. We’ll issue you a statement of funds paid on a T5 form every year in February.

Dependents

When you first qualify for an annuity fund, we ask you to identify a dependent. This is the person to whom we would make a lump sum payment if you died before you received your annuity.

Note: A dependent is not necessarily the same as a beneficiary.

A dependent is defined in the Workers' Safety and Compensation Act. A dependent is a member of the worker's family who is dependent on the worker’s earnings for the ordinary necessities of life.

You may change your designated dependent by contacting our Finance Unit.

More information

Policy on annuities

Workers' Safety and Compensation Act