How much of a pension does a spouse get after death?

According to the Pension Rights Center, federal law requires private pension plans to offer benefits to a surviving spouse unless both spouses waive the right. How much of a pension does a spouse get after death depends on several factors, including the type of pension plan, the specific survivor benefit option chosen, and whether the pension holder died before or after retirement. Understanding these details is crucial for financial security after a loss.

Quick Summary

The amount of a survivor's pension depends on the specific plan type, the elected benefit option, and when the pension holder passed away. Federal law protects spousal rights, but waivers can impact eligibility. Key factors include private versus public pensions, pre- or post-retirement death, and chosen survivorship percentages. Plan administrators and legal documents clarify the rules.

Key Points

• Benefit varies by plan type: The survivor pension amount depends on whether the plan is a defined benefit (traditional pension) or a defined contribution (like a 401(k)).

• Joint-and-survivor annuity: Most defined benefit plans offer a joint-and-survivor annuity, providing a spouse with a lifetime income, typically 50% to 100% of the retiree's reduced monthly payment.

• Spousal consent is required for waivers: Federal law protects married spouses by requiring their written consent to waive survivor benefits in defined benefit plans.

• Timing of death impacts payout: If the pension holder dies before retirement, the benefit amount and start date may differ from when death occurs after retirement.

• Defined contribution plans use account balance: For 401(k)s and similar plans, the survivor receives the remaining account balance, not a monthly income stream.

• Government and military pensions have specific rules: Federal employee pensions (FERS/CSRS) and military Survivor Benefit Plans have distinct percentages and eligibility requirements.

• Action is required to claim benefits: A surviving spouse must contact the plan administrator, provide a death certificate, and complete paperwork to initiate benefits.

• Divorce impacts benefits: Divorce settlements can affect survivor benefits, often requiring a Qualified Domestic Relations Order (QDRO) to protect a former spouse's rights.

Factors influencing the amount of a survivor's pension

The amount a surviving spouse receives from a pension is not a fixed percentage. It is determined by several factors, including the type of pension, the specific benefit election, and the timing of the pension holder's death. The rules for private pensions, governed by federal law, differ from those for public or military pensions, so it is essential to understand the specifics of each plan.

Defined benefit vs. defined contribution plans

• Defined benefit plans (Pensions): These plans promise a specific payout at retirement, usually based on salary and years of service. Federal law (ERISA) mandates that these plans offer a survivor benefit to married participants. The standard benefit is a joint-and-survivor annuity, which provides a reduced monthly payment to the retiree during their lifetime and continues to pay at least 50% of that reduced amount to the surviving spouse after the retiree's death. The retiree can elect a higher percentage, such as 75% or 100%, which would further reduce their own monthly payout. Opting out of any survivor benefits requires the spouse's written consent.
• Defined contribution plans (401(k)s, 403(b)s): In these plans, the survivor's benefit is the remaining balance of the account. Spouses are typically the automatic beneficiary unless they sign a waiver, allowing the account holder to name a different beneficiary. There is no ongoing monthly benefit; the survivor receives the lump sum or continues the investment. If the deceased had already withdrawn or spent the funds, there may be nothing left.

Impact of retirement status at time of death

Whether the pension holder dies before or after retiring significantly affects the survivor's payout and options. The timing determines how the benefit is calculated and when the surviving spouse can begin receiving payments.

• Death after retirement: If the pension holder was already receiving payments, the survivor benefit will follow the option chosen at retirement. For a joint-and-survivor annuity, the spouse would receive the elected percentage of the retiree's reduced benefit for the rest of their life.
• Death before retirement: If a vested employee dies before retirement, the surviving spouse is typically entitled to a lifetime annuity. The pension is often calculated as if the employee had retired early on the day of death. The spouse may have the option to begin receiving a smaller, immediate payment or wait until the employee would have reached retirement age for a larger benefit. Some plans may also offer a lump-sum death benefit in addition to or instead of an annuity.

Comparison of pension survivor benefits

Feature	Defined Benefit (Pension)	Defined Contribution (401(k), IRA)
Benefit Type	A continuous, lifetime annuity based on a percentage of the original pension payment.	The remaining balance of the account, paid as a lump sum or continued investment.
Spousal Protection	Strong federal protection (ERISA); a spouse must consent in writing to waive survivor rights.	Spouses are the default beneficiary but can waive their right, which is common in plans like 401(k)s.
Amount Received	Dependent on the elected percentage (e.g., 50%, 75%) and the retiree's reduced monthly benefit.	The entire account balance at the time of the owner's death.
Decision Timing	The decision to choose a survivor benefit and the percentage is made at the time of the pension holder's retirement.	The beneficiary is designated during the account setup and can be changed later. A spouse's waiver is required to name someone else.
Effect on Income	Choosing a survivor benefit reduces the monthly payout to the retiree during their lifetime.	The retiree's monthly income is not directly affected, but a lump-sum payout to the survivor can result in taxes.

Specific cases: Military and government pensions

• Military: The Survivor Benefit Plan (SBP) is a military-sponsored program that can provide up to 55% of the service member's retired pay to a surviving spouse. This is an election made upon retirement, and if declined, it cannot be added later. There are also programs through the Department of Veterans Affairs (VA) that offer Survivors Pension benefits to eligible spouses, often based on income limits.
• Federal Government (FERS and CSRS): The Federal Employees Retirement System (FERS) provides a maximum survivor annuity of 50% of the retiree's unreduced annual benefit, while the Civil Service Retirement System (CSRS) offers a maximum of 55%. An election to provide a partial survivor benefit is also available but requires spousal consent.

What to do to claim survivor benefits

When a loved one passes away, taking action is necessary to claim any entitled benefits. The process and documentation will vary depending on the type of pension. The surviving spouse should contact the plan administrator or employer of the deceased to begin the process.

1. Gather documents: The primary document required is a certified copy of the death certificate, along with the marriage certificate and the deceased's Social Security number.
2. Contact the administrator: Reach out to the pension plan administrator, the deceased's former employer, or government agency (e.g., OPM for federal pensions, VA for military) as soon as possible.
3. Review the summary plan description: This document will explain the available benefits, eligibility requirements, and the specific election made by the pension holder.
4. Complete necessary forms: The plan administrator will provide the required paperwork to apply for the survivor benefits. If the death was before retirement, the spouse may need to choose a payout option.
5. Consider rolling over funds (if applicable): For defined contribution plans, the survivor may have the option to roll the inherited funds into their own IRA to continue tax-deferred growth.

Conclusion

Understanding how much of a pension a spouse gets after death is complex and depends heavily on the type of plan and the choices made during the pension holder's lifetime. For private defined benefit plans, federal law ensures a spousal benefit of at least 50% unless waived. Government and military plans have their own specific rules and percentages. For defined contribution plans, the benefit is the account's remaining balance. Crucially, surviving spouses must act promptly, gather documentation, and work with the plan administrator to ensure they receive all entitled benefits. Early communication and careful planning are the best ways to protect a spouse's financial future.

---

For more detailed information on specific pension rights and federal regulations, a valuable resource is the Pension Rights Center.

---

Frequently Asked Questions

What is a joint-and-survivor annuity?

A joint-and-survivor annuity is a type of pension payout where the retiree receives a reduced monthly payment during their lifetime. After their death, the surviving spouse continues to receive a predetermined percentage (e.g., 50%, 75%, or 100%) of that reduced monthly payment for the rest of their life.

Can a spouse be denied a pension after the death of their partner?

For private defined benefit plans covered by ERISA, a spouse cannot be denied a survivor pension unless they have provided written, notarized consent to waive their rights to that benefit. However, rules vary for public, military, and defined contribution plans, and an ex-spouse may also have rights through a QDRO.

What happens if a pension holder dies before retirement?

If a vested employee dies before retirement, the surviving spouse is typically entitled to a lifetime annuity. The benefit is often calculated as if the employee had retired early on the date of death. The spouse may have the option to start a smaller benefit immediately or wait for a larger benefit at a later date.

How do survivor benefits work for a 401(k) or IRA?

For defined contribution plans like a 401(k) or IRA, the survivor benefit is the balance of the account. The surviving spouse is the default beneficiary and can choose to take a lump-sum payout or roll the funds over into their own retirement account. However, this is only if the funds have not already been withdrawn.

Is a surviving spouse's pension taxable?

Yes, survivor benefits from a pension are generally taxable. The survivor typically reports the pension income in the same way the plan participant would have. Tax treatment may vary, so it's advisable to consult a tax professional or financial advisor.

Does remarriage affect a surviving spouse's pension benefits?

In many pension plans, remarriage may affect survivor benefits, especially if it occurs before a certain age. For example, some military plans may suspend benefits if remarriage occurs before age 55. However, rules vary by plan, so the specific policy regarding remarriage must be reviewed.

What documentation is needed to claim a survivor's pension?

To claim a survivor's pension, you will typically need to provide a certified copy of the death certificate, proof of marriage, and the deceased's Social Security number. The plan administrator may require additional forms.