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Spousal Claims to Pension Benefits

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Understanding the Legal Background for Retirement Planning

The Employee Retirement Income Security Act of 1974 (ERISA) protects the assets of working Americans by ensuring the funds placed in their retirement plans are there when they retire. This federal law sets the standard for all private industry retirement plans.

ERISA does not force any employer to have retirement plans, but it does require those that do, to meet the minimum established standards. ERISA does the following:

  • Requires plans to provide employees with plan information;
  • Sets minimum standards for participation, vesting, benefit earning, and funding;
  • Keeps plan fiduciaries (those who control or manage the plan or assets) accountable;
  • Allows participants to sue for benefits or breaches of fiduciary duty; and
  • Guarantees benefits will be paid in the event a defined plan is terminated, through the Pension Benefit Guaranty Corporation.

How Do I Claim Survivor Benefits?

ERISA protects the spouse of the deceased participant who earned a vested pension prior to death. The surviving spouse should contact their deceased spouse’s plan administrator or employer to file a claim for benefits. Most likely, you will need to provide the death certificate to the retirement plan administrator.

You should then be notified of the amount and form of benefit payments, whether the benefit may be rolled over into your retirement plan, and if a rollover is possible, how and at what time the rollover must be made.

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How to Receive Survivor’s Benefits Under a Defined Contribution Plan?

Defined contribution pension plans are those that each participant has their own individual account. These benefits are paid out in a lump sum that is equal to the value of the person’s account at the time of issue. Terms may vary, and payment can be paid in different forms, such as a life annuity.

In most 401(k) plans and other defined contribution plans, the surviving spouse will automatically receive survivors benefits. In the instance that the individual decided to have a different beneficiary, the spouse would have had to sign a consent waiver in the presence of a witness.

How to Receive Survivor’s Benefits Under a Defined Benefit Plan?

Defined benefit pension plans are those in which participants do not have individual accounts. Benefits begin at the person’s retirement age, in the form of a life annuity, and include a survivor’s benefit. This survivor’s benefit, a qualified joint and survivor annuity (QJSA), will continue over the participant’s lifetime as well as their spouse’s lifetime. The payment received by the spouse will be at least half of the benefit that the participant received during their joint lives.

How Can I Change a Survivor’s Benefits?

To change your survivor benefit election after retirement, it must be in writing and within 30 days of your first regular annuity payment. If you change it to anything other than the maximum benefit, you must get your spouse’s consent or a waiver of consent. If it is after the 30 days, you cannot cancel the survivor benefit.

You may be able to change your election after the 30 days and before 18 months has passed under the following circumstances:

  • You may elect a survivor annuity; or
  • You can increase a reduced survivor annuity amount.

Ex-Spouse’s Claims to Work-Related Retirement Benefits

If your previous marriage lasted 10 years or more, you can receive benefits on your ex-spouse’s record (whether they’ve remarried or not) if:

  • You are currently unmarried;
  • You are age 62 or older;
  • Your ex-spouse is able to receive Social Security retirement or disability benefits; and
  • Your own benefit that you are entitled to receive is less than the benefit you would receive based on your former spouse’s work.

An ex-spouse’s right to benefits does not necessarily dissolve after a divorce decree, settlement agreement, or court order. Even if state law denies an ex-spouse’s rights to benefits, it may still be possible to receive retirement plan payments.

As a divorced spouse, the benefit you would receive is half of your former spouse’s full retirement amount, and will not include any delayed retirement credits they may receive. After divorce, and regardless of a settlement, an ex-spouse

Spousal Claims Against Individual Retirement Plans

In the case of divorce, you can access your IRA or 401(k) before retirement with no tax penalty. The reason being, if the court orders part of your account to your spouse, you can tap the funds tax-free to comply with the divorce order. It is possible for your spouse to receive a portion, all, or none of your retirement account, depending on your circumstances.

Should You Seek Legal Help?

Retirement planning is an important step for securing your future. If you have any questions regarding survivor’s benefits, naming a new beneficiary, or you just need clarification on your retirement plan, contact an estate attorney or an employment attorney that focuses on pension and benefits in your area. Your lawyer will be able to advise you of your options, help you evaluate risks, and develop a plan that works best for you.

Photo of page author Sarah Tipton

, LegalMatch Legal Writer

Last Modified: 07-24-2018 06:22 PM PDT

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