A Spouse's Right to Pension Benefits If the Beneficiary Dies Before Retirement

If you are a surviving spouse, you may be entitled to pension benefits if your spouse was vested in a former employer's pension plan. To be vested, he or she must have worked in the company the required number of years specified by the plan.

As explained by Pension Appraisers, Inc., there are two categories of survivor benefits. Pre-retirement benefits are paid to the designated beneficiary if the employee dies prior to retirement. Post-retirement benefits are paid to the beneficiary if the employee dies after having retired.

According to the Pension Benefits Guaranty Corporation, defined benefit pension plans must provide married employees with a qualified joint and survivor annuity. The Employee Retirement Income Security Act provides that the surviving spouse is entitled to a pension benefit if the worker dies after retiring.

As the surviving spouse, you would continue to receive pension benefits, normally at a reduced rate, as long as you live. As indicated by Martin Silfen, Esq. on the BenefitsLink website, the pension plan is required to pay the surviving spouse an annuity that is at least 50% of the amount of the pension the plan participant was receiving.

Starting in 1985, pension plans are required to provide joint and survivor benefits unless the worker specifically waives that form of payment. The joint and survivor annuity must be offered as the normal option. The worker may decide to waive the survivor annuity benefits in order to increase the amount of his or her own pension benefits. But in order to waive the option, the spouse has to consent to the waiver in writing. Also, since August 23, 1984, when the Retirement Equity Act was signed, defined benefit plans are required to provide the spouse with benefits if the worker dies before retiring.

As pointed out by Global Action on Aging, your spouse's pension plan may require that you were married throughout the one-year period prior to the date the annuity payments began, if you were receiving pension benefits, or prior to the date of the worker's death. Once you begin receiving survivor's benefits, there should be no penalty if you remarry.

As indicated by Raymond James, a firm of independent financial advisors, if your spouse dies after retirement, you should start receiving your surviving spouse annuity benefits immediately. If your spouse dies before retiring, the pension plan can start making surviving spouse benefit payments when your spouse would have reached the age for early retirement. The early retirement benefit is generally a smaller amount than the full retirement benefit. But you could decide to wait until your spouse would have reached normal retirement age in order to claim the full retirement benefit.

Sources:

Finding a Lost Pension, Pension Benefits Guaranty Corporation

Martin Silfen, Esq., Survivor Pension Benefits, BenefitsLink.com

Pension Issues for Widows and Widowers, Global Action on Aging

Rights of Surviving Spouses, Raymond James