02 Nov I’m divorced. My wife will get half my pension. What happens if she dies?

Q. My ex wife will receive half my pension when I retire. If she passes before me, will I receive that half back or can she pass it on to a beneficiary, say my daughter?
— Divorced

A. There are many factors that determine how a pension or retirement benefits are distributed during a divorce.

Some are controlled by the divorce agreement while others are dictated by the plan’s administrator.

Retirement benefits, such as a pension, amassed during the course of a marriage are subject to equitable distribution in the event of a divorce, said Kenneth White, a certified matrimonial attorney with Shane and White in Edison.

“The agreement of the parties regarding how such benefits are to be distributed are set forth in a marital settlement agreement that serves to memorialize the agreement of the parties, as well as a Qualified Domestic Relations Order (QDRO) that serves to dictate to the plan administrator how the retirement benefits at issue are to be distributed.”

Whatever the parties decide, the terms of the plan will factor in and can’t be controlled by the parties, White said.

For example, he said, some plans offer survivor benefits and others do not.

“If no survivor benefits are available to be elected and the participant of the plan passes, it is very likely that the ex-spouse, non-participant, may receive no payouts,” White said. “Ultimately, it depends on the specific language of the plan.”

Even if survivor benefits are an option to elect, very often parties fail to elect them, either because they are uninformed or because they do not want to incur the consequences of electing survivor benefits, White said.

Generally, when survivor benefits are elected, the monthly or annual payout from the pension is reduced, he said.

Still other plans will allow an ex-spouse to continue to receive his or her share of the payouts regardless of whether actual survivor benefits were elected or whether the participating spouse passes prior to the ex-spouse, he said.

So to your specific question, what happens to the pension payouts will probably be determined by the terms of the plan, he said.

“Some plans will read that upon a non-participant’s death, so much of the benefits that were assigned to the non-participant — ex-spouse — will simply terminate. That is it, no more payout of those funds to anyone,” he said. “Other plans will read that upon the non-participant’s death, that the participant — you — will begin receiving 100% of the payout, both the share assigned to you by way of your marital settlement agreement and Qualified Domestic Relations Order as well as so much of the benefits that had been going to your ex-wife.”

In rare circumstances, the terms of a plan will allow a non-participate to dictate what is to happen to his or her share of the pension benefits in the event of his or her death, including assigning survivor benefits to a third party such as your daughter, White said.

“Ultimately, the answer to your question is controlled by the terms of the plan, and if the plan allows for the assigning of survivor benefits, then it’s the decision of your ex-spouse,” White said.

For a more precise answer, you should contact your plan administrator to confirm what options the plan allowed at the time your benefits were accruing, he said.

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This story was originally published on Nov. 2, 2021.

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