Surviving spouse annuity (group protection)
A protection benefit, most often under a group plan, that pays the surviving spouse of a deceased employee a temporary or lifetime annuity, in addition to or instead of a lump-sum death benefit.
The surviving spouse annuity aims to replace, for the household, part of the income the deceased employee provided. It may be for life, paid until the surviving spouse's death, or temporary, paid until the age at which the spouse can draw their own pension, sometimes followed by a bridging annuity. Its amount is expressed as a percentage of the deceased's reference salary, and the contract defines the spouse, most often including civil partners and established cohabiting partners. Unlike a lump sum, the annuity protects against rapid spending of the money received, but it transfers longevity and interest rate risk to the insurer: it must reserve the present value of future payments from the date of death. In France, these annuities are often managed by OCIRP, a union of provident institutions specializing in annuity benefits, and provided for by industry collective agreements.
OCIRP, created in 1967 by provident institutions to pool surviving spouse and education annuities, reserves on the death of a 50-year-old employee all the annuity payments the surviving spouse will receive until drawing their own pension.
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