'RPM International employees should regularly review their pension type, payout elections, and beneficiary designations to help align retirement income with long-term family goals and avoid unintended consequences for heirs.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

'RPM International employees who understand the differences between DB and DC plans, along with the impact of survivor benefits, are better positioned to make informed decisions that can support both their retirement needs and their legacy goals.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

1. The differences between Defined Benefit (DB) and Defined Contribution (DC) pension plans.

2. How survivor benefits and payout options work for spouses and other beneficiaries.

3. What happens to pension and retirement account funds if no beneficiary is named or upon the retiree’s death.

When planning for retirement, many people focus on growing income while they are living. Yet, understanding what happens to your Fortune 500 pension after your death is equally important. The type of plan you have, the payment method you choose, and whether you have named a beneficiary will determine if—and to whom—your benefits can be passed on.

Social Security survivor benefits operate under different rules and are separate from pensions. This discussion focuses on workplace and private pensions, which often include survivorship clauses that, if structured properly, can provide continued financial support to loved ones.

What are the two main types of workplace pensions?

Defined Benefit (DB) Plan

Defined benefit plans promise specific monthly retirement payments based on service and salary, while defined contribution plans depend on contributions and investment performance. A DB plan promises a specific monthly payment at retirement, calculated based on factors like years of service and salary history. Fortune 500 is responsible for making sure the plan is funded and bears the investment risk. These are sometimes called “final salary” or “traditional pensions.”

What is a defined contribution retirement plan?

A DC plan accumulates contributions from you and your employer, with final income determined by contributions, investment performance, and your withdrawal strategy, including 401k and 403b plans. In a DC plan, you, Fortune 500, or both contribute to your account. The final retirement amount depends on contributions and investment performance. You manage the investment risk, and income is determined by your withdrawal plan and account balance. Examples include 401k, 403b, and 457 plans.

Who inherits defined contribution plan balances after death?

Named beneficiaries inherit remaining DC plan balances, with nonspouse beneficiaries generally required to withdraw within ten years under the SECURE Act, while estates may incur additional taxes. In most cases, DC plans are straightforward to pass on. If you die before using the full balance, your named beneficiary inherits the remaining amount. Under the SECURE Act, most non‑spouse beneficiaries must withdraw the full balance within ten years, while spouses often have rollover flexibility. If you have no beneficiary listed, the balance may go to your estate, potentially increasing taxes and delaying access.

What pension payout option protects a surviving spouse?

Federal law typically requires married DB plan participants to receive a Qualified Joint and Survivor Annuity as the default, ensuring spousal income continues after death unless the spouse consents otherwise. Federal law generally requires a Qualified Joint and Survivor Annuity (QJSA) as the default payout form for married DB plan participants unless the spouse consents to another choice. This makes sure your spouse continues to receive income after your passing.

Common DB payout options include:

• Joint and Survivor Annuity:  You receive lifetime payments; your spouse continues to receive a percentage (generally 50%, 75%, or 100%) for life after your death.

• Life with Period‑Certain Annuity:  You get lifetime payments, and your spouse or beneficiary receives payments for the remainder of a guaranteed term if you pass first.

• Guaranteed Minimum Payment:  Provides a fixed number of total payments; any remaining payments go to your spouse if you pass away early.

• Joint and Contingent Survivor Annuity:  Allows a beneficiary other than your spouse (with spousal consent) or a custom continuation percentage.

Should single retirees choose lump sum or annuity payouts?

Single retirees without dependents may prefer lump sum payouts since single-life annuities typically end at death, leaving no remaining payments for heirs. For single retirees without dependents, a lump sum payout may be preferable to an annuity, as many single‑life annuities stop payments at death.

Benefits of lump sum payouts:

• Investment control is in your hands.

• Ability to name heirs for remaining funds.

• Potential to roll over to an IRA for tax deferral.

• Risks of lump sum payouts:

• Mismanagement could deplete funds too soon.

• Investment returns are not assured.

What happens to pension benefits when no beneficiary is named?

Without a beneficiary, DB and DC plan balances may default to your estate, causing probate delays and less favorable tax treatment than direct beneficiary transfers. If a DB single‑life annuity is chosen, payments stop upon death. With a term‑certain annuity, any remaining guaranteed payments may go to your estate. In a DC plan, the balance may default to your estate, possibly leading to probate delays and less favorable tax treatment.

Where do pension benefits go if death occurs during retirement?

DB plan outcomes depend on the chosen option: single-life annuities end, joint-life annuities continue to the spouse, and period-certain options pay beneficiaries through the guaranteed term; DC balances transfer to beneficiaries with ten-year withdrawal rules for nonspouses. For DB plans, your chosen payment option and beneficiary designation determine what happens. Single‑life annuities end immediately; joint‑life annuities continue to pay the surviving spouse. Period‑certain options pay beneficiaries for the rest of the guaranteed term. For their part, DC plans transfer the remaining balance to the beneficiary, with non‑spouse heirs generally required to withdraw within ten years.

Key Takeaways for Fortune 500 Employees

Regardless of whether you have a DB or DC plan, planning ahead is essential:

• - Keep beneficiary information current.

• - Understand how payout options affect survivor benefits.

• - Be aware of tax rules for inherited pensions and retirement accounts.

• - Seek professional guidance before making irreversible decisions.

By making informed choices, you can make sure your Fortune 500 pension serves both your retirement needs and the legacy you want to leave for loved ones.

Dividing retirement assets in a QDRO proceeding requires a clear understanding of what RPM International offers through its benefit programs. For retirement planning purposes, RPM International maintains an active defined benefit pension plan, meaning eligible employees continue to accrue benefits based on years of service and compensation. If you are eligible for a lump sum payout, IRS Section 417(e) segment rates determine how the future annuity stream converts to a present-value payment - rising rates compress the lump sum, so monitoring the plan's stability period and lookback month is critical before you lock in your election date. The choice between a single-life annuity, a joint-and-survivor option, or a lump sum (where available) is generally irrevocable once made, and timing that decision relative to interest rate conditions can meaningfully affect your retirement income picture.

Shifting to healthcare, RPM International provides continued medical coverage to eligible retirees, which can bridge the gap between retirement and Medicare eligibility at age 65 or serve as a supplement to Medicare thereafter. Confirming the service and age requirements for retiree coverage, and understanding your premium contribution, is an important step in building an accurate healthcare cost projection. Coordinating RPM International's retiree coverage with Medicare Part B and Part D enrollment timing can also reduce duplication and avoid late-enrollment penalties. Connecting your specific RPM International benefits situation to a comprehensive retirement income plan - and understanding how each component interacts - gives you the most complete picture of what retirement will look like.

Sources:

1. Employee Benefits Security Administration.  What You Should Know About Your Retirement Plan . U.S. Department of Labor, n.d. pp. 6, 9–10, 21–22, 32.

2. Internal Revenue Service.  Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs) . IRS, 19 Mar. 2026, pp. 7–12, 9–10.

3. Social Security Administration.  Survivors Benefits . Social Security Administration, Apr. 2026, pp. 5–6, 8–9, 10.