Working hard to retire is a goal everyone strives for. Unfortunately, some never reach it due to an untimely death. If your dad recently passed away, you might wonder if you can receive his retirement pension.

We’ll explain the factors determining whether it’s possible to transfer it to you or another beneficiary and how to do it. You can develop your approach to obtaining his retirement pension with some easy tips and guidelines.

Key Takeaways

• Most retirement pensions can be transferred to a beneficiary depending on the type of pension.

  
  

• You can receive your dad’s pension if he set you up as the beneficiary or if the pension plan administrator gives it to you. If you’re not the designated beneficiary, having it transferred to you will be difficult.

  
  

• If you are eligible to have your dad’s retirement pension transferred, you must follow a specific process.

Can I Get My Dad’s Pension After He Dies?

Getting your dad's pension ultimately relies on the type of pension he had. Some pension plans allow for a signed beneficiary, while others may be up to the pension plan administrator or the state.

If your dad had a defined contribution plan, then most likely, the pension would allow for an assigned beneficiary to collect after his death. He would be the one to decide who would be able to receive the pension after his death.

If your dad never mentioned who the beneficiary is, contact his pension plan provider directly. You will likely need to have legal documents ready to provide information as proof of kinship for them to disclose the information.

If your dad left a will, check to see if there’s information included about the pension. Retirement documents or statements could also have some information regarding an assigned beneficiary.

Suppose your dad had a retirement pension that did not allow him to choose a beneficiary. In that case, the decision is up to the employer's pension plan administrator to decide on the beneficiary.

Chances are, your mom or your dad’s civil partner will be the one to receive the benefits. However, dependent children are also an option to become a beneficiary. The best way to determine this is to contact your dad’s pension plan administrator for more information.

Can Pensions Be Transferred After Death?

In most cases, retirement pensions can be transferred to beneficiaries after death. However, the rules for transferring pensions depend primarily on the type of pension. Factors such as age and if the pension had any withdrawals also come into play.

There are three main types of retirement pensions: defined contribution, defined benefits and state-provided pensions.

A defined contribution pension is based on how much has been paid into it. They’re typically provided by employers but can also have individual plans. These pensions can be assigned to a beneficiary of choice after death.

Note: For self-employed people, there is a pension type called “Self-Invested Personal Pension (SIPP)” and a “self-employed pension option.” These types fall under the defined contribution pension model since they rely on how much money has been contributed.

A defined benefits pension is provided by employers. Employers contribute to it based on the person’s salary and the number of years they worked for the company. These pensions are typically more strict about whom they can be transferred to. They typically only allow the following types of beneficiaries:

• Spouse

• Civil partner

• Dependant child

Ultimately, the pension plan administrator typically is the one who chooses who gets the benefits transferred after death. If your dad retired and started collecting from his pension, the amount you will get will be reduced.

A state-provided pension is a pension the government provides in the form of social security. The transfer of the pension primarily depends on the state and its regulations. In most cases, they’re not transferable, but in some instances, the spouse or dependent child may qualify for a “survivor benefits pension.”

Additionally, if the pension is explicitly a single-life pension, a beneficiary will not be included, and you will not be able to get your dad’s retirement pension.

Additional Factors for Pension Transfers

Each pension type has slightly different rules regarding how the beneficiaries can receive the pensions after the person’s death. The main things affecting the amount of the pension transferred are the age of when the person died and if the person made any withdrawal from the pension.

For example, defined contribution pensions can be transferred to beneficiaries tax-free if the person dies before age 75 and has not begun collecting on it. The beneficiaries will have up to two years to claim it and decide if they want it as a lump sum, drawdown investment or an annuity.

Pensions will typically provide the most if the person dies before they retire and has not collected any money.

It’s also important to emphasize some pensions will not take any beneficiary, especially if they’re a single-life pension.

How to Claim Pension Benefits as a Beneficiary

Here are some pointers on how you should approach getting your dad's pension.

Notify the Pension Holder

Reaching out to the pension holder will help you determine if you are eligible for it to be transferred to you or not.

Be prepared to gather the necessary legal information to move things forward. You will need your dad’s social security number, full legal name, birthdate, and date of his death. You will also need some legal documentation of yourself to validate your identity.

You can use Trustworthy to keep all types of family documents safe and well-organized so this process can go smoothly.

If you successfully get it transferred, follow the next steps of the required process.

Submit Claim Paperwork

One of the things you will be expected to do is fill out a lot of paperwork. This will require you to have your dad's death certificate and a beneficiary designation form to complete the claim.

Keep track of all the important documents as you work on the paperwork. Hold on to everything you get back from the pension plan administrator.

Choose a Payment Form

Once all the paperwork is done, you should be able to transfer your dad's retirement pension into your ownership. Some pension plans will give you a choice of how you want it to be distributed.

Your payment options are typically a lump sum, period payments or an annuity. 

Financial planner at Prudential, Matthew Koppelman, explains:

"Under most plans, a non-spouse inherited pension plan would be paid out in a lump sum that could be moved to a Beneficiary IRA or Inherited IRA.” 

However, an additional rule here may delay the amount of time it takes to receive the inheritance. 

Koppelman notes:

"Per the Secure Act of 2019, an inherited IRA must be fully distributed by December 31st of the 10th year following the death of the original account owner."

Remember, you also need to pay taxes on your dad's retirement pension once it’s transferred. However, some pension rules have factors allowing you to collect the money tax-free depending on whether your dad died before he retired and if he ever withdrew money from it.

Speak With a Financial Advisor

Consulting with a financial advisor can help you plan ahead and make good decisions on what to do with your dad's retirement pension.

The sooner you consult with an advisor, the better. You should be considerate of your dad's retirement funds and use them responsibly. Discussing your goals with a financial advisor could help you find ways to invest that money and use it for a meaningful purpose.

Practical Tips to Get a Retirement Pension

If you're struggling with where to begin collecting your dad’s retirement pension, these tips will help you get on the right track.

Stay Organized

Organization is key when it comes to transferring your dad’s retirement pension. You will need to collect and manage many legal documents in order to transfer your dad's pension to your ownership.

In addition, you should also take notes anytime you are on the phone with someone who is helping you with the transfer. Be prepared to follow instructions and write them down so you won't forget what you must do as you work toward your goal.

Follow Up Persistently

Getting a hold of the right people to help answer your questions or begin a process can be frustrating. You may have instances where the provision plan administrator isn't accepting or returning your calls.

The important thing is not to get discouraged and give up, even when you feel like you haven’t made much progress. If someone you are calling doesn't pick up the phone, always leave a detailed message with your name, the purpose of the call and your number.

They should reach back to you eventually.

Consult a Professional

If you begin to feel overwhelmed or discouraged about what to do next, consider contacting a professional who can help guide you.

Financial advisors or planners are generally a good choice of professionals to contact regarding information on transferring retirement pensions. Another possibility would be speaking with someone who specializes in life insurance plans.

Whoever you decide to reach out to, be sure they’re a reputable professional working in the area where you’re struggling to get answers.

Frequently Asked Questions (FAQs)

Who is entitled to a deceased person's Social Security?

State-provided retirement pensions are generally more strict on transferring benefits to another person. However, there are “survivor benefits,” which could lead to it being transferable to a spouse or child if they meet the right federal requirements.

How long does a pension last?

The pension type determines the duration of the pension. Defined benefit pensions are typically payments that last a lifetime. Defined contribution pensions, on the other hand, could be lifetime but also be a lump sum. Ultimately, defined contribution is determined by how much the person has contributed before retirement.

How is a pension paid out after death?

Pensions typically are paid out through monthly payments. However, some pensions also offer lump sum payments or are paid through other forms of annuities. Ultimately, the payment options are determined by the person’s pension rules.

How do inheritance pensions work with taxes?

Most inherited pensions will be taxed once they’re transferred, regardless of the payment type. However, there are certain exemptions where the money won't be taxed, such as if the person died before retirement and didn’t take any money out of the pension. Certain rules and restrictions apply to different pension types.