Future retirees in a pension plan are often referred to as deferred vested participants. A deferred vested participant is someone who has met the participation requirement in a pension plan, earned a benefit before terminating employment, and did not receive a lump sum payment for the value of their benefit.
When pension plan participants apply for retirement benefits, they have the option to choose a beneficiary to receive some or all of their retirement benefit upon their death. If the participant is married, the law requires the participant to name their spouse as beneficiary unless the spouse consents in writing to a different beneficiary designation. This protection does not apply to divorced former spouses of participants unless they obtain a legal document called a Qualified Domestic Relations Order (QDRO). Read Qualified Domestic Relations Orders and PBGC to learn how QDROs work for plans trusteed by PBGC.
When a married participant dies before starting to receive their benefit, the pension plan is required by law to pay their spouse a survivor benefit, called a pre-retirement survivor annuity. Although some plans pay death benefits to non-spouses, such benefits are rarely allowed under PBGC rules for trusteed plans.