Retirement Planning

What Happens To My Pension If I Die Before I Retire?

Protect future payments from your pension plan by ensuring a beneficiary has been named. If no one has been named, the distribution of your pension will be determined by the rules of your plan and/or state.

Pension Plan Outcome if I Die Before I Retire

What will happen to my pension plan?

If you're fortunate enough to work for a company that offers you a pension plan, you can feel good knowing that come retirement, you'll have a steady income to draw from. But what happens to your pension if you die before you retire?

The importance of naming a beneficiary

When you initially enroll in your employer's pension plan, you'll be asked to name a beneficiary. The beneficiary is the person who will receive your pension when you die. Much like naming a beneficiary on a life insurance policy, you can name one or more individuals to receive the benefits of your pension. If you don't designate a beneficiary or if the original beneficiary has since died and you failed to assign a replacement or don't have a contingent beneficiary, your pension will be distributed according to the rules specified in your pension plan and in some cases, your state of residence. With some plans, that could mean having benefits distributed to a surviving spouse (if you have one), your children (if any), your parents (if still alive), or other next of kin. Therefore, if you want to have a say in who inherits your pension, assigning a beneficiary and regularly reviewing your beneficiary form is important.

The pension payout

How your beneficiary is paid depends on your plan. For example, some plans may pay out a single lump sum, while others will issue payments over a set period of time (such as five or 10 years), or an annuity with monthly lifetime payments. Regardless of how it's distributed, your beneficiary will be required to report the proceeds from your pension as income on his/her taxes.

If you were to die before you retire, your surviving spouse or other named beneficiary must contact your employer or the plan's administrator to make a claim on any available benefits. At that time, the plan administrator will generally request a copy of the death certificate. Depending on the type of plan, your surviving spouse or other named beneficiary will be notified as to:

  • the amount and form of benefits (in other words, lump sum or installment payments under an annuity);

  • whether death benefit payments from the plan may be rolled over into another retirement plan; and

  • if a rollover is possible, the method and time period in which the rollover must be made.1

As a part of your retirement planning, don't forget to make sure you have named a beneficiary to your pension plan. To learn more about pensions and defined benefit plans, visit the Protective Life Learning Center.

1https://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics---Death

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Your Pension Plan and Beneficiary

An employer-sponsored pension plan is just one way to defer today's income for retirement. But what would happen to your pension dollars if you were to die before you retire? This article looks at how pensions are paid out when you die, as well as the importance of designating a named beneficiary. For more information, visit the Protective Life Learning Center.


All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.

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