Practice Quiz

CLEP Business Law

Category - Legal Envrmt

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Lori and Leon are married. Lori participates in her company's pension plan and is 100% vested. Lori is 64 and plans to retire when she is 65. Upon retirement, she will receive $3,000 per month in benefits. What will happen to Lori's benefit payments upon her death?
  1. The benefit payments will cease.
  2. Leon will continue to receive benefit payments.
  3. Lori's children will receive her benefit payments.
  4. Leon will receive her benefit payments until his death. Then Leon's children will receive them and then his grandchildren.
  5. The beneficiary whom Lori designated will receive her benefit payments.
Explanation
Answer: B. Upon Lori's death, Leon will continue to receive benefit payments. Under ERISA, a spouse is entitled to receive survivor benefits, unless both spouses waive this option in writing. The amount of survivor benefits can vary from the original amount of the benefit payments.
Category: Legal Environment
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