Understanding Payee Types

Three possible types of people can receive pension payments: retirees, beneficiaries, and QDRO alternate payees. They are all pension payees. Beneficiaries and QDRO alternate payees are non-employee payees.

Retirees are former employees who earned their benefits through their own service within the organization. Retirees who leave the organization after vesting but before retirement are also known as "terminated deferred-vested employees."

Beneficiaries and QDRO alternate payees, on the other hand, collect a benefit that was earned by someone else. A beneficiary collects survivor benefits after the death of a retiree. A QDRO alternate payee is an employee's former spouse who, as part of a divorce settlement, is entitled to a portion of the employee's pension benefit. QDRO alternate payees are subject to a plan's rules governing when employees may begin receiving benefits.