With the pension plan that I pay into, if the person dies before collecting any pension, the survivng spouse receives a lump sum refund of the money that their now-deceased better half payed into the plan PLUS interest. If the person retires and starts collecting the pension, and then dies, the spouse receives a monthly "spousal pension" eqaul to 50% of dead spouse's pension (for the rest of his/her life).
If the employee's spouse dies prior to the employee collecting their pension, or if the employee and his/her spouse divorce at least 365 days prior to the employee collecting their pension, then upon the employee's retirement, the employee will receive their usual pension PLUS a refund of the amount that was paid into fund the spousal pension PLUS interest. (Ex-spouse receives NADA...NOT a darn thing IF divorce was 365 days or more prior...if divorce was less than 365 days prior, ex-spouse receives the same as if married) This lump sum refund also applies to the employee who has remained unmarried.
I fall into that last category....unmarried....therefore I will receive my full pension PLUS the refund of the amount that was paid into fund the spousal pension PLUS interest. That amount in my case is about $15,000. Of that amount, I will pay about $9,500 to purchase an additional 5 years service credit in the pension, $5,000 will be rolled into an IRA ($4,000 regular contribution & $1,000 'catch-up' for being age 50), and $500 will be taxed at 20%.....leaving me with $400 to throw my retirement party!!!!
OR I may just take that $5,000, screw rolling it into an IRA, let them have the 20% in taxes, leaving me with $3900....and throw one HELLATIOUS retirement party....a.k.a. = Screw everybody, I'm going to the Bahamas to celebrate!!!