Funding the Purchase of an Annuity Policy 21-206 | Effective Date: June 14, 2019

Policy

For certain injured workers and surviving spouses, WorkSafeNB sets aside an amount of money to offset potential deficits in pensions at retirement. This set aside is used to fund the purchase of an annuity at age 65. These amounts accrue interest based on the rate of return, whether positive or negative.

Interpretation

1.  To qualify to have an amount set aside, the injured worker must be entitled to receive loss of earnings benefits for twenty-four consecutive months. If there is any full calendar month within the qualifying period for which the injured worker is not entitled to receive benefits, WorkSafeNB will disregard the time accumulated, and begin tracking a new qualifying period on the next calendar month that the entitlement to benefits resumes.

2. WorkSafeNB begins tracking the qualifying period based on the month in which entitlement to loss of earnings benefits commences, regardless of the actual day of the month that the injured worker became entitled to benefits.

3. When an injured worker is receiving salary from their accident employer, entitlement to loss of earnings benefits commences only after the employer stops paying salary.

4. An injured worker can qualify to have an amount set aside through more than one claim if entitlement to benefits remains consecutive for a 24 month period. Once the individual has qualified to have the amount set aside, WorkSafeNB sets aside an amount for any subsequent claims.

5. The amount set aside is ten percent of the amount of benefits the injured worker is entitled to receive from WorkSafeNB. This applies to workers who reach the age of 65, or die, on or after January 1, 2009.

6. The set aside amount is based on the compensation paid by WorkSafeNB after having been reduced by disability benefits under the Canada Pension Plan.

7. WorkSafeNB determines the amount set aside for survivor benefits based on when the death of the worker occurs and the elected benefit of the spouse. More information is provided in Policy 21-515 Benefits for Survivors.

8. When the injured worker or the surviving spouse reaches age 65, WorkSafeNB determines an amount that is to be used to purchase an annuity.

9. In determining the total amount available to purchase an annuity, WorkSafeNB calculates the total set aside and the accrued interest based on the rate of return.

10. Amounts owing to WorkSafeNB from an overpayment, in accordance with the Limitations of Actions Act, are deducted before issuing the amount to purchase an annuity.

11. The injured worker or surviving spouse must select one of the following annuity options to purchase from a third party:

• Five years;
• Ten years; or
• A lifetime annuity.

12. When the pension to which an injured worker or surviving spouse is entitled to would be less than five hundred dollars per year, WorkSafeNB may, in lieu of requiring the purchase of an annuity, pay the total amount (amount of set aside plus the accrued rate of return) as a lump sum.

13. The injured worker or surviving spouse must designate a beneficiary or beneficiaries for the annuity. When there are no dependents, WorkSafeNB must be named as the annuity’s primary irrevocable beneficiary on the signed contract. When there are dependents, WorkSafeNB must be named as the annuity’s secondary irrevocable beneficiary on the signed contract.

14. When the injured worker or surviving spouse dies before reaching age 65, WorkSafeNB divides the total amount set aside plus the accrued rate of return among all surviving dependents. If WorkSafeNB determined that there are no dependents, the total amount set aside plus accrued rate of return reverts to WorkSafeNB’s Accident Fund.