Can Pensions Be Inherited? Spouse Rules, Taxes, and Claims

Pensions can be inherited, but what passes to you depends on the type of plan, your relationship to the person who died, and whether payments had already started. A surviving spouse has the strongest claim under federal law and is entitled to at least 50% of the benefit for life on most private pensions. Non-spouse heirs typically receive whatever account balance exists, but face a 10-year deadline to withdraw it. A traditional pension with no account balance may end entirely when the named survivor dies.

What You Actually Inherit Depends on the Plan

Two very different things get called “pensions,” and the inheritance rules split along that line.

Traditional Pensions (Defined Benefit Plans)

A traditional pension calculates monthly income from a formula based on salary and years of service rather than building an account you can see.¹ When the retiree dies, there is no balance to hand down. The plan instead pays a survivor annuity, a continued monthly check to the named beneficiary. Federal law requires that survivor payment to fall between 50% and 100% of what the retiree had been receiving.² Once that beneficiary dies, payments stop. Nothing is left to pass to grandchildren or anyone else.

This is the single biggest surprise for families expecting to “split” a pension. A traditional pension is a promise to pay income, not a pot of money, and the promise typically ends with one survivor.

401(k)s, 403(b)s, and Similar Accounts

Defined contribution plans hold a real balance. When the owner dies, the full balance goes to whoever is named on the beneficiary form. That person can take a lump sum, roll the money into an inherited retirement account, or, if they are the surviving spouse, roll it into their own account.³ Because there is a tangible balance, these accounts can also pass through an estate to later heirs if the first beneficiary dies before spending the money.

What a Surviving Spouse Automatically Gets

Federal law gives spouses protections no other beneficiary receives, and these protections apply automatically to most private-sector plans governed by ERISA.⁴

If the Retiree Had Started Receiving Payments

ERISA-covered pension plans must pay a married participant’s benefit as a Qualified Joint and Survivor Annuity (QJSA) unless both spouses agree in writing to something different. The QJSA pays the participant for life, then continues paying the surviving spouse for the rest of their life at no less than 50% of the original amount.² Many plans offer a 75% or 100% survivor option, though higher survivor rates lower the monthly payment during the retiree’s lifetime.

If the Participant Died Before Retiring

The Qualified Preretirement Survivor Annuity (QPSA) requires the plan to pay the surviving spouse a portion of the benefit the participant had earned up to the date of death.⁵ This kicks in automatically. A participant cannot redirect the benefit to a child, sibling, or anyone else without the spouse’s written, witnessed consent.²

The Spousal Waiver

A spouse can give up the survivor annuity, but the waiver must be in writing, must spell out the effect of giving it up, and must be witnessed by a notary or plan representative.² If the participant names a non-spouse as the primary beneficiary without that consent, the plan must still honor the spouse’s claim. Once benefits begin or the participant dies, the waiver cannot be undone.

One catch worth knowing: plans are allowed to require that the participant and spouse were married for at least one year before the survivor benefit applies.² A spouse who married the participant shortly before death may be disqualified by this provision.

The Spousal Rollover

Surviving spouses who inherit a 401(k) or IRA get an option available to no one else: they can roll the inherited account into their own IRA and treat it as if it had always been theirs.³ That resets the required distribution timeline. A younger widow or widower can let the money keep growing tax-deferred until their own required beginning date, instead of being forced to empty the account within 10 years as most non-spouse heirs are.

What Non-Spouse Heirs Receive

The 10-Year Rule

Most non-spouse beneficiaries who inherit a retirement account from someone who died after 2019 must withdraw the entire balance by the end of the 10th year following the year of death.⁶ This covers inherited 401(k)s, 403(b)s, and IRAs. If the original owner had already started required minimum distributions, the beneficiary must also take annual distributions during those 10 years, with the account emptied by the deadline.⁷

Who Escapes the 10-Year Rule

A narrow group of “eligible designated beneficiaries” can stretch distributions over their own life expectancy:

Minor children of the account owner, until they reach the age of majority, at which point the 10-year clock starts.
Disabled or chronically ill individuals, for as long as they live.
Anyone not more than 10 years younger than the account owner, which often includes siblings close in age.

Everyone else, including adult children and friends, falls under the standard 10-year rule.³

If no beneficiary was ever named, the plan’s default rules decide. Most send the money first to the surviving spouse, then to children, then to the estate, where probate can slow things down and expose the money to creditors.

How Divorce Changes Things

A finalized divorce ends a former spouse’s automatic entitlement to survivor benefits. If the participant remarries, the new spouse picks up those rights.⁸

The only way for a former spouse to preserve a claim to pension survivor benefits is through a Qualified Domestic Relations Order (QDRO), a court order issued during divorce that tells the plan to treat the former spouse as the surviving spouse for the annuity. With a QDRO in place, the plan must pay the QJSA or QPSA to the former spouse, and any new spouse cannot be treated as the survivor for the portion the order assigned.⁸ A divorce decree that simply says “each party keeps their own retirement” does not create a QDRO, and without one the former spouse’s pension rights disappear.

Only a spouse or former spouse can be designated as a surviving spouse under a QDRO. Children and other dependents cannot fill that role, though they can be named as alternate payees for a share of a defined contribution account.

Taxes on What You Inherit

Distributions from an inherited pension or retirement account are generally taxed as ordinary income in the year you receive them. For 2026, federal marginal rates run from 10% to 37%.⁹ A large lump sum can push you into a higher bracket, which is why many beneficiaries spread withdrawals across several years when the plan allows.

If you take an eligible rollover distribution as cash rather than rolling it directly into another retirement account, the plan must withhold 20% for federal tax before cutting the check.¹⁰ A direct rollover to an inherited IRA, or for a spouse to their own IRA, avoids that withholding because the money never passes through your hands.

Inherited Roth IRAs are the exception to the ordinary-income rule. Contributions always come out tax-free, and earnings come out tax-free as long as the Roth was open at least five years before the owner’s death.³ The 10-year deadline still applies for non-spouse heirs, but no tax bill follows.

Missing a required minimum distribution triggers an excise tax of 25% on the amount you should have withdrawn. That penalty drops to 10% if you correct the mistake within two years.⁶ These penalties apply to inherited accounts too, so beneficiaries subject to annual distributions or the 10-year clock need to watch the calendar.

How to Claim an Inherited Pension

Gather Your Documents

Collect the paperwork before you contact anyone. Most plans ask for:

A certified copy of the death certificate. Order several, because the plan, bank, and Social Security Administration may each want one. Fees typically run from $5 to $30 per copy, depending on the state.
Proof of your relationship, such as a marriage certificate for a spouse or a birth certificate for a child.
Government-issued photo ID and your Social Security number.
Letters of administration or testamentary documents, if you are claiming through the estate as a court-appointed representative rather than as a named beneficiary.¹¹

Ask for the Summary Plan Description

The Summary Plan Description (SPD) explains the plan’s rules in plain language, including how to file a claim, the distribution options, and the applicable deadlines. ERISA requires plan administrators to provide it to participants and beneficiaries.¹² Request the SPD and the official claim forms from the employer’s HR department or the plan’s third-party administrator.

File the Claim and Pick a Distribution

Once you submit the forms and supporting documents, the plan administrator generally has 90 days to approve or deny the claim. For a defined benefit pension, the plan dictates the payment structure. For a defined contribution account, you typically choose between a cash lump sum and a rollover to an inherited IRA. The rollover avoids the mandatory 20% withholding and gives you more control over when the money is taxed.

If the Plan Failed, or You Can’t Find It

Traditional private-sector pensions are backed by the Pension Benefit Guaranty Corporation (PBGC), a federal agency that takes over when a plan terminates without enough money to pay what it promised. The PBGC pays benefits up to a legal maximum that varies by age and payout form.¹³ The PBGC does not cover 401(k) accounts, state and local government pensions, or church plans.

If you believe a relative had a pension but you cannot locate it, the PBGC maintains a searchable database of unclaimed benefits from terminated plans. You can search by last name and the last four digits of the Social Security number.¹⁴ For a plan the PBGC did not terminate, you may need to contact the former employer directly, check old tax records for the plan administrator’s name, or ask the Department of Labor for help.

If Your Claim Is Denied

Every ERISA-covered plan must give you a written explanation if your benefit claim is denied, including the specific reasons and the plan provisions that support the decision, and must offer a full and fair chance to appeal.¹⁵ The letter should also describe any additional information that would help.

Check the Summary Plan Description for the appeal deadline. Missing it can forfeit your right to go to court later. During the appeal, you can submit additional documents and written arguments to the plan fiduciary who reviews the case. ERISA generally requires you to exhaust this internal process before filing a lawsuit in federal court, and the record you build on appeal often decides any later case. An attorney with ERISA experience is especially useful at this stage.

1
Internal Revenue Service. Defined Benefit Plan
2
Office of the Law Revision Counsel. 29 USC 1055 – Requirement of Joint and Survivor Annuity and Preretirement Survivor Annuity
3
Internal Revenue Service. Retirement Topics – Beneficiary
4
U.S. Department of Labor. Employee Retirement Income Security Act (ERISA)
5
Internal Revenue Service. Retirement Topics – Qualified Pre-Retirement Survivor Annuity (QPSA)
6
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
7
Internal Revenue Service. Required Minimum Distributions for IRA Beneficiaries
8
U.S. Department of Labor. QDROs: The Division of Retirement Benefits Through Qualified Domestic Relations Orders
9
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill
10
eCFR. 26 CFR 31.3405(c)-1 – Withholding on Eligible Rollover Distributions
11
Pension Benefit Guaranty Corporation. Report a Death
12
Internal Revenue Service. 401(k) Resource Guide – Plan Participants – Summary Plan Description
13
Pension Benefit Guaranty Corporation. Maximum Monthly Guarantee Tables
14
Pension Benefit Guaranty Corporation. Find Unclaimed Retirement Benefits
15
Office of the Law Revision Counsel. 29 USC 1133 – Claims Procedure