Post-retirement death: if there is no eligible spouse, what happens to the remaining benefits?

• A. The survivor's death benefit is paid to the spouse only
• B. The survivor's death benefit is paid to the spouse; if no eligible spouse, a commuted lump-sum to the named beneficiary; if no named beneficiary, to the estate.
• C. The pension ends with no payout
• D. The death benefit goes to the insurer

Answer: (B)

The key idea is how survivor benefits are handled when there’s no eligible spouse after retirement. A survivor benefit is meant to continue to someone designated by the member, typically the spouse. If there is an eligible spouse, the remaining benefits stay with that spouse as the survivor payout. If there isn’t an eligible spouse, the plan generally converts the remaining benefit into a commuted lump-sum payment to a named beneficiary. If no beneficiary has been named, the funds go to the member’s estate. This arrangement avoids leaving the benefits unallocated and explains why the payout flow moves from a potential ongoing pension to a lump-sum or to the estate. It also clarifies why the insurer doesn’t automatically receive the benefit, and why the exact outcome depends on plan rules and beneficiary designations.