Pension benefits

Dear Liza: My Dad passed away last year in the month of November.  Prior to Daddy’s death, he was receiving monthly pension benefits.  Once my step-mother notified the insurance company that Daddy had died, the company immediately withdrew his pension benefits from their checking account in the month of December.  Up to this date, my step-mother hasn’t been able to receive Daddy’s pension benefits.    Can the insurance company refuse to give my step-mother my dad’s pension benefits? Yes, they can. Pensions often terminate upon the death of the participant. Unlike an IRA or 401-K, traditional pensions are often promises of a monthly benefit for the lifetime of an employee, based on the length of time that employee worked for the company.  (IRA’s and 401-K plans allow an employee to save their own money during their peak earning years on a tax-deferred basis, so that they can withdraw the money after they’ve retired.  If they die with money left in those accounts, they can leave this money to a named beneficiary.)  Sometimes, a pension plan allows an employee to elect to take less during their lifetime so that their surviving spouse can receive benefits during his or her lifetime, but not always. If your father had a plan that only paid him a pension during his lifetime, your stepmother wouldn’t be entitled to any benefits under the plan.  Perhaps your stepmother can get clarification of how the pension worked from your father’s former employer.