Policy
If a worker receives future economic loss (FEL) payments, the WSIB will set aside an additional amount equal to 10% of every FEL payment for the loss of retirement income (LRI) benefit. Workers are entitled to receive LRI benefits at age 65.
A worker who is 64 years or older on the date of injury is not eligible for the LRI benefit.
Purpose
The purpose of this policy is to set out when contributions are made toward the LRI benefit, when the LRI benefit is payable, and the types of LRI payments.
Guidelines
Definitions
Account balance - the amount of LRI contributions made by the WSIB and the accumulated investment income.
Annuity payment scheme - a set of monthly payments that distributes the account balance based on the payment option selected by the worker or surviving spouse.
FEL payment - the actual amount of monies paid to the worker prior to any redirection, see 18-01-06, Redirected Benefit Payments. This amount is equal to 90% of the difference between the worker's pre-injury net average earnings and the post-injury net average earnings the worker earns or is able to earn in suitable and available employment, which includes any Canada/Quebec Pension Plan disability payments the worker may receive for the injury or disease. See 18-01-13, Calculating CPP/QPP Offsets from FEL/LOE Benefits.
Pre-retirement death benefit -the amount of LRI contributions made by the WSIB and the accumulated investment income that may be paid if the worker dies before age 65.
For a definition of "spouse," "dependent child," "other dependants," or "survivor,"see 20-01-02, Definitions and Application Dates.
Contributions toward LRI benefits
Workers must experience a loss of earnings for 12 continuous months to be entitled to a FEL benefit. See 18-04-04, Breaking Continuity of Temporary Disability.
If workers receive FEL payments, the WSIB will set aside an additional amount equal to 10% of every FEL payment for the LRI benefit. This 10% LRI contribution is based on the total of FEL benefits, supplementary FEL benefits and FEL benefits equivalent to Old Age Security benefits. See 18-04-09, Electing the OAS Equivalent, 18-04-11, Supplements for Programs and Return-to-Work Activities Before and After 24 Months and 18-04-12, Supplement Following Significant Deterioration.
Entitlement to LRI benefits
Workers are not eligible to receive payment of the funds in their LRI account prior to age 65. At that time, workers become entitled to the LRI benefit based on the amount of contributions made by the WSIB and the accumulated investment income.
Types of LRI payments
The LRI benefit is paid as a lump sum or a monthly annuity based on the amount of the annual benefit generated by the worker's account balance at age 65. Workers do not have the option of selecting the payment type.
If the worker's account balance at age 65 is less than the actual amounts that were contributed due to investment losses, the WSIB will pay out an account balance equal to the contributions made.
Lump sum
If the worker's account balance will generate an annual LRI benefit of less than the maximum amount of average earnings for the year in which the worker turns 65, it will be paid as a lump sum.
The maximum amount of average earnings is determined annually by calculating 175% of the average industrial wage for Ontario for the year. For more details, see 18-01-03, Benefit Dollar Amounts - Accidents before 1998.
Monthly annuity
If the worker's account balance will generate an annual LRI benefit of more than the maximum amount of average earnings for the year in which the worker turns 65, it will be paid monthly according to the annuity payment scheme the worker selects from the following list:
- Joint and survivor
- Life
- Life with return of account balance
- Life with a fixed guarantee period, or
- Life with a guarantee to age 90.
For more information on the annuity payment schemes, see Ontario Regulation 715/94.
The WSIB sends an LRI information package to workers who are entitled to an annuity. Workers must sign and return the annuity election form before turning 65 or the LRI benefit is paid as the default annuity outlined below.
- If the worker has a spouse (as defined in 20-01-02, Definitions and Application Dates) with whom they were cohabiting at age 65, the LRI benefit is paid as a joint and survivor annuity, unless the worker and spouse make a joint election indicating otherwise.
- If the worker does not have a spouse at age 65, the default is the life annuity with a fixed guarantee period of 10 years.
LRI benefits (death before age 65)
If the worker dies before age 65, the WSIB determines the LRI benefit payable based on whether the worker's death was work-related or non-work-related.
Non-work-related death
If the worker dies before age 65 of a non-work-related injury or disease, the WSIB pays a pre-retirement death benefit, under the first applicable category in the order listed below:
- surviving spouse (as defined in 20-01-02, Definitions and Application Dates) who was cohabiting with the worker at the time of their death
- living dependent children (in equal shares)
- other living dependents (in equal shares), or
- worker's estate.
Work-related death
If the worker dies before age 65 of a work-related injury or disease, the WSIB pays survivors' benefits, see 20-01-02, Definitions and Applications Dates.
Individuals who receive survivors' benefits are not eligible to receive the LRI pre-retirement death benefit. If there are no survivors, the WSIB pays the LRI pre-retirement death benefit to the worker's estate.
Types of LRI payments (death before age 65)
The WSIB normally pays the pre-retirement death benefit as a lump sum.
If there is a surviving spouse, and the worker's account balance will generate an annual LRI benefit of at least $1,333.45*, the spouse may choose to receive it as a life annuity (*2018 amount. This amount may vary due to annual indexing.). To receive the annuity, the spouse must send the WSIB a signed request within 90 days of being notified of the annuity option.
If the worker's account balance at the time of their death is less than the actual amounts that were contributed due to investment losses, the WSIB will pay out an account balance equal to the contributions made.
Special circumstances
Account maintenance
Prior to the payment of the LRI benefit, the WSIB may make corrective adjustments at any time in the maintenance of the LRI benefit account (e.g., account balance discrepancies).
Assignments, garnishments, and support deduction orders
LRI benefits are subject to assignments, garnishments, and support deduction orders only when the LRI benefit is payable to the worker at age 65 or to the worker's estate. See 18-01-06, Redirected Benefit Payments and 18-01-07, Automatic Deduction for Family Support.
Benefit-related debts
Benefit-related debts are recoverable from an LRI benefit account only when the LRI benefit is payable. A worker’s benefit-related debt cannot be recovered by the WSIB from any recipient of LRI benefits other than the worker or estate unless the recipient provides written authorization. See 18-01-04, Recovery of Benefit-Related Debts.
Multiple accounts
If workers have more than one LRI benefit account upon death or at age 65, the WSIB combines these accounts before payment is made.
Retroactive increases/decreases to FEL payments
FEL Increases
If the WSIB retroactively increases FEL payments, the WSIB determines the total amount of the retroactive FEL payments and any related interest.
- If the LRI benefit has not yet been paid, the WSIB sets aside additional LRI contributions equal to 10% of this total.
- If the LRI benefit has already been paid, the WSIB calculates the additional LRI contributions equal to 10% of this total, and then pays the additional LRI benefit as a lump sum.
No retroactive investment income is paid on the additional LRI contributions.
FEL Decreases
If the WSIB retroactively decreases FEL payments prior to the payment of the LRI benefit, LRI contributions previously made by the WSIB are adjusted to reflect the decrease. (These changes are considered to be corrective adjustments in the maintenance of the LRI account as no LRI benefits have been paid.)
If the WSIB retroactively decreases FEL payments after the LRI benefit is paid, as a lump sum or annuity, no further action is taken unless the LRI benefit payment is determined to be a recoverable benefit-related debt. See 18-01-04, Recovery of Benefit-Related Debts.
FEL commutations
If the worker's FEL benefit is commuted to a lump sum (see 18-04-08, Commutation of Benefits), the WSIB makes a one-time LRI contribution based on 10% of the lump sum FEL payment. However, the LRI benefit is still not paid until the worker reaches age 65 or upon death if prior to age 65.
Application date
This policy applies to all decisions made on or after March 1, 2021, with respect to LRI benefits payable on or after April 30, 2011, for all accidents from January 2, 1990 to December 31, 1997.
Policy review schedule
This policy will be reviewed in 2023.
Document history
This document replaces 18-04-17 dated December 6, 2018.
This document was previously published as:
18-04-17 dated December 1, 2011
18-04-17 dated October 14, 2009
18-04-17 dated April 7, 2008
18-04-17 dated January 3, 2007
18-04-17 dated October 12, 2004
05-07-02 dated August 1, 2003.
References
Legislative authority
Workplace Safety and Insurance Act, 1997, as amended
Section 54, 102, 103.1
Workers' Compensation Act, R.S.O. 1990, as amended
Section 44
O. Reg. 715/94, as amended
Minutes
Board of Directors #15, September 23, 1994, Page 5812
#4, April 5, 1991, Page 5439
Administrative
#40, March 24, 2021, Page 590