How are death benefits typically paid from a pension plan?

• A. Benefits paid to the employer
• B. Only as a lump sum to the estate
• C. To nominated beneficiaries as a lump sum or continuing income, depending on plan rules; if not nominated, benefits may pass to the estate
• D. Only as a survivor's pension to the spouse

Answer: (C)

Death benefits from a pension plan are intended for people you designate. The payout goes to nominated beneficiaries and can be given as a lump sum or as ongoing income, depending on what the plan allows. If you haven’t named anyone, the benefit may default to your estate to be distributed under your will or by intestacy rules. This approach means the form and recipients of the benefit are driven by plan rules and your nominations, rather than being automatically paid to the employer or limited only to a survivor’s pension to a spouse.