Who Gets Your Pension When You Die: Spouse, ERISA, and QDRO Rules

Under federal law, your surviving spouse is first in line to inherit your pension. Most private-sector plans must pay a surviving spouse a survivor annuity worth at least 50 percent of the benefit you had earned, and that protection applies automatically unless your spouse signs a written, witnessed waiver.¹ If you are unmarried, or your spouse has properly waived their right, the pension passes to whoever you named on your beneficiary designation form on file with the plan. A divorce decree, a will, or a prenuptial agreement does not override those rules, and the answer differs somewhat depending on whether you have a traditional pension, a 401(k)-type account, or a government plan.

Your Spouse Comes First Under ERISA

The Employee Retirement Income Security Act puts a surviving spouse ahead of every other potential heir. Under 29 U.S.C. § 1055, a covered pension plan must offer benefits as a qualified joint and survivor annuity: monthly payments during your lifetime, then continuing payments to your spouse for the rest of theirs. The survivor portion must equal at least 50 percent of the amount paid during your joint lives, and plans may offer up to 100 percent.¹

If you die before your annuity starts, the same protection carries through in a different form. A qualified preretirement survivor annuity pays your spouse a benefit based on your vested account. For a defined benefit plan, the spouse’s annuity is calculated as though you had retired the day before you died. For an individual account plan, the preretirement survivor annuity is worth at least 50 percent of your vested balance.¹

Naming Someone Other Than Your Spouse

You can direct the benefit elsewhere, but only with your spouse’s explicit, informed consent. The waiver must be in writing, signed by your spouse, and witnessed by a plan representative or a notary public. It must acknowledge the effect of giving up the survivor annuity, and it must name a specific alternate beneficiary or form of benefit that cannot be changed without further spousal consent.¹ Without a waiver that meets every one of those requirements, the plan administrator has to pay your spouse regardless of what any other document says.

A Prenup Will Not Redirect Your Pension

A prenuptial agreement in which a future spouse gives up pension rights is not a valid ERISA waiver. The statute requires consent from “the spouse of the participant,” and a fiancé is not yet a spouse. Federal regulations confirm this: an agreement signed before marriage does not satisfy the spousal consent rules, even if it was signed during the applicable election period.¹ If you relied on a prenup to send your pension somewhere else, the plan will still pay your spouse. The fix is to have your spouse sign an ERISA-compliant waiver after the wedding.

Vesting Decides Whether Anything Passes at All

Before any survivor benefit applies, you have to have a vested right in the plan. Vesting means you have worked long enough to have a nonforfeitable claim to your accrued benefit. The qualified preretirement survivor annuity only covers the vested portion. If you die before you are fully vested, your survivors receive a benefit based on the vested percentage, and the unvested portion is forfeited back to the plan.²

Many plans use a graded schedule that reaches 100 percent after five to seven years. Others use a cliff schedule that vests you entirely after a set period but gives you nothing if you leave a day early. For younger workers or anyone who recently changed jobs, checking vesting status matters more than choosing beneficiaries. If none of the benefit has vested, there is nothing for anyone to inherit.

Divorce and QDROs Can Carve Out an Ex-Spouse’s Share

Federal law generally prohibits assigning or transferring pension benefits to another person. The exception is a qualified domestic relations order, or QDRO. A QDRO is a court order issued during a divorce that gives a former spouse, child, or dependent the right to receive a defined portion of a participant’s pension. The order has to specify the names and addresses of both the participant and the alternate payee, the amount or percentage to be paid, the number of payments or the period covered, and the specific plan it applies to.³

A QDRO can also designate a former spouse as the recipient of surviving-spouse benefits under the plan. Once those benefits are allocated through a valid QDRO, they are carved out of the pool available to a current spouse. Remarrying does not undo a QDRO. If an ex-spouse holds one entitling them to survivor benefits from your pension, your current spouse may receive a reduced benefit or none at all from that plan. If the divorce decree never addressed the pension, or no QDRO was ever filed with the plan administrator, the current spouse’s ERISA rights remain intact.

Who Inherits If You Are Unmarried or Your Spouse Waived

When there is no spouse, or when the spouse has signed a valid waiver, the pension follows the beneficiary designation form on file with the plan. The primary beneficiary receives the benefit first. A contingent beneficiary steps in only if the primary beneficiary has already died. These designations override a will, so the person named on the plan form collects the benefit even if your will says something different.

Outdated forms cause a lot of the fights. People forget to update them after a marriage, divorce, or the death of the original beneficiary. If no valid beneficiary is named, or every named person has predeceased you, the plan follows a default order written into its own documents. The typical hierarchy sends benefits first to the surviving spouse, then to children in equal shares, then to surviving parents, and finally to the participant’s estate. Once the money reaches the estate, it becomes subject to probate and the terms of the will.

Naming a Trust Instead of a Person

Some participants name a trust rather than an individual, usually to control how the money is spent over time or to protect a minor child. A trust can work as a pension beneficiary, but it adds complexity. For tax purposes, a trust may face shorter distribution timelines and annual minimum withdrawal requirements unless it qualifies as a “see-through” trust whose individual beneficiaries the plan can identify. Setting one up correctly generally requires an estate planning attorney. For straightforward family situations, naming individuals directly is simpler and usually produces better tax outcomes.

What the Beneficiary Actually Receives

The form of the payout depends on the type of plan.

Traditional Pensions

A defined benefit pension typically offers several payout structures chosen at retirement, and that choice locks in what the survivor gets. A life-only annuity pays the highest monthly amount but stops the day the retiree dies. A joint and survivor annuity continues paying the surviving spouse for their lifetime, with the survivor amount set at 50, 75, or 100 percent of the joint payment. A period-certain option guarantees payments for a fixed number of years, commonly 10 or 20; if the retiree dies within that window, the remaining payments go to the beneficiary.

The tradeoff is consistent: the more protection you build in for a survivor, the lower your monthly payment while you are alive. A joint-and-100-percent-survivor annuity produces a noticeably smaller monthly check than a life-only option, and the reduction is permanent.

401(k) and Similar Accounts

Defined contribution plans work differently because there is no monthly annuity to continue. The beneficiary inherits the account balance at the time of death.⁴ A surviving spouse has the most flexible options: they can roll the entire balance into their own IRA, treat it as their own account, and continue deferring taxes on the growth.⁵ A non-spouse beneficiary can transfer the balance into an inherited IRA through a direct trustee-to-trustee transfer, but cannot treat it as their own account and faces stricter withdrawal timelines.⁶

If a beneficiary takes a lump sum directly rather than rolling it into an IRA, the plan must withhold 20 percent for federal income taxes off the top.⁷ That withholding may not cover the full tax bill if the distribution pushes the recipient into a higher bracket.

Taxes on the Money the Beneficiary Inherits

Every dollar a beneficiary receives from a pension or retirement account is generally taxed as ordinary income in the year of withdrawal. This applies to annuity payments from a defined benefit plan and to lump-sum or periodic withdrawals from a 401(k) or IRA. There is no capital gains treatment for inherited retirement plan distributions.

The Surviving Spouse’s Tax Advantage

A surviving spouse can roll an inherited retirement account into their own IRA and treat it as if they had always owned it.⁵ No required distributions until the spouse reaches their own required beginning date (currently age 73), and the money continues to grow tax-deferred in the meantime.⁸ No other type of beneficiary gets this option.

The 10-Year Rule for Non-Spouse Beneficiaries

Most non-spouse beneficiaries who inherit a retirement account from someone who died in 2020 or later must withdraw the entire balance within 10 years of the owner’s death.⁶ Whether annual minimum withdrawals are also required during that window depends on when the original owner died relative to their required beginning date:

If the owner died before reaching RMD age, no annual minimums are required in years one through nine, but the account must be emptied by December 31 of the tenth year.
If the owner died after reaching RMD age, the beneficiary must take annual distributions in years one through nine, calculated using the IRS Single Life Expectancy Table, and the account must still be fully depleted by the end of year ten.⁹

A narrow group of “eligible designated beneficiaries” can still stretch distributions over their own life expectancy instead of following the 10-year clock: the surviving spouse, minor children of the deceased (until they reach the age of majority), disabled or chronically ill individuals, and anyone not more than 10 years younger than the deceased.⁶

If a beneficiary subject to annual minimum withdrawals misses one, the IRS imposes an excise tax of 25 percent on the amount that should have been taken. The penalty drops to 10 percent if the shortfall is corrected within two years.⁸

Government Pensions and Social Security Follow Different Rules

ERISA governs most private-sector pension plans. Federal, state, and military pensions operate under their own systems. The idea of a survivor annuity exists across all of them, but the details differ enough to matter.

Federal Employees

Under the Federal Employees Retirement System, a retiring employee elects either a full or partial survivor annuity. The full survivor benefit pays the surviving spouse 50 percent of the retiree’s unreduced annuity; the partial option pays 25 percent.¹⁰ Unlike private-sector plans, FERS requires the employee to affirmatively elect coverage at retirement. Declining the survivor benefit can also cost a spouse eligibility for the Federal Employees Health Benefits program and federal long-term care insurance.

Social Security Survivor Benefits

Social Security is not a pension, but it is often the largest source of survivor income. A surviving spouse can collect starting at age 60, or age 50 with a disability, provided the marriage lasted at least nine months before the worker’s death. Ex-spouses qualify if the marriage lasted at least 10 years. Unmarried children under 18 (or up to 19 if still in school full-time) and adult children disabled before age 22 are also eligible.¹¹ One rule catches many widows and widowers: remarrying before age 60 forfeits Social Security survivor benefits. Remarriage after 60 does not affect eligibility. Some federal and military survivor benefits use a similar cutoff at age 55.

How the Survivor Actually Claims the Benefit

Claiming a pension survivor benefit means filing with the plan administrator, or with the relevant agency for a government plan. Starting promptly matters, because some plans do not make retroactive payments for months of delay.p>

A certified copy of the death certificate is the starting document, and most administrators require it before processing anything.¹² Order several certified copies, because you will need one for the pension plan, one for Social Security, and possibly more for insurance and banking. Beyond the death certificate, expect to provide the deceased’s Social Security number and your own tax identification number for IRS reporting, the plan member identification number or most recent benefits statement, a marriage certificate if claiming as a surviving spouse (or a copy of the QDRO if claiming as a former spouse), and the plan’s beneficiary claim form, sometimes called a Request for Death Benefits.¹³

For an ERISA-covered plan, the administrator has 90 days from receipt of the claim to issue a decision, extendable by another 90 days if the plan notifies you in writing before the first period expires. Send documents by certified mail with return receipt, or save the confirmation page for an online submission, so there is a record of the filing date. If the claim is denied, the plan must give at least 60 days to file an internal appeal, and courts generally will not hear a lawsuit until that internal process has been exhausted.¹⁴

1
Office of the Law Revision Counsel. 29 USC 1055 – Requirement of Joint and Survivor Annuity and Preretirement Survivor Annuity
2
Internal Revenue Service. Qualified Pre-Retirement Survivor Annuity (QPSA)
3
Office of the Law Revision Counsel. 29 USC 1056 – Form and Payment of Benefits
4
Office of the Law Revision Counsel. 26 USC 414 – Definitions and Special Rules
5
Office of the Law Revision Counsel. 26 USC 402 – Taxability of Beneficiary of Employees Trust
6
Internal Revenue Service. Retirement Topics – Beneficiary
7
Internal Revenue Service. Topic No. 412, Lump-Sum Distributions
8
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
9
Internal Revenue Service. Required Minimum Distributions for IRA Beneficiaries
10
U.S. Office of Personnel Management. How Is the Amount of My Benefits as a Surviving Spouse Determined?
11
Social Security Administration. Who Can Get Survivor Benefits
12
USAGov. Agencies to Notify When Someone Dies
13
Pension Benefit Guaranty Corporation. Report a Death
14
eCFR. 29 CFR 2560.503-1 – Claims Procedure