Can I leave my employee pension to my spouse or to my child?
UPDATED: November 29, 2011
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It is generally possible to leave your employee pension to your spouse or your child, meaning that if you pass away, the payments will continue to be made to the specified survivor. However, whether or not you can do this in any specific situation will depend on the type of employee pension you have.
If your employee pension plan is a defined benefit plan, it may include a clause for survivor's benefits. A survivors benefit clause means that, should a plan participant die before his or her spouse, the benefits will continue to pay out throughout the remainder of the spouse's lifetime. The payments you receive as a married individual while both spouses are still alive will be a specific amount calculated based upon the support required for your household. This amount may change upon the death of one spouse. The survivor's benefit, which is often called a qualified joint and survivor annuity, must be at least half of the payment amount received while both partners were alive.
You and your spouse can, however, agree to waive the survivor's benefits if you like, and you may choose to have all or part of the benefits left to a child instead. In order to do this, you and your spouse must complete and sign a written waiver stating the specifics of the alternate plan, and have the statement notarized and legally verified. If your spouse predeceases you, you may also be able to leave your pension to your child.
Your employer's pension may also provide you with other options. In some instances, you may be able to elect to have your employee pension continue for a guaranteed period of time, regardless of your death. For example, you can elect a ten-year guaranteed pension and if you die during the ten years, you can name a beneficiary to whom the pension benefits will be distributed. If you are offered such a plan, generally the amount you receive in your pension is reduced.