Pop-Up Option

DEFINITION of 'Pop-Up Option'

A joint and survivor pension option, generally limited to married couples, that is triggered if the pension plan member's spouse predeceases the plan member. The pop-up option then boosts the plan member's pension after the spouse's death. The increase in the pension amount is made possible by the fact that the pension plan no longer has to provide a spousal pension once the plan member passes away.

BREAKING DOWN 'Pop-Up Option'

This option has a cost attached to it. All things being equal, a plan member who opts for the pop-up option will receive a smaller pension than a member who does not choose the pop-up option. Since the plan member's spouse would receive this lower pension amount if the plan member passes away first, due consideration should be given to the relative states of health of the plan member and the spouse, in addition to which a cost-benefit analysis on the merits of the pop-up option itself may be necessary.

RELATED TERMS
  1. Pension Option

    A set of options that a pensioner has in regard to the handling ...
  2. Pensionable Service

    The period of service, expressed in a yearly figure, for which ...
  3. Plan Participant

    A plan participant either contributes into a pension plan or ...
  4. Unfunded Pension Plan

    An employer managed retirement plan that uses the employer's ...
  5. Fully Funded

    A pension plan that has sufficient assets needed to provide for ...
  6. Pension Adjustment Reversal - PAR

    A numerical calculation in certain Canadian pension plans that ...
Related Articles
  1. Retirement

    Pension Plans: Pain Or Pleasure?

    Employees have a love/hate relationship with this retirement option.
  2. Retirement

    7 Signs Your Pension Fund Is In Trouble

    Even if you're lucky enough to have a pension plan, you can't assume it'll pay out.
  3. Financial Advisors

    New 401(k) Pension Rollover Rule: Pros and Cons

    Is the new rule allowing participants to roll their 401(k) balances into pensions a good idea?
  4. Retirement

    How Safe Is Your Pension?

    A 2014 law permits some private pension plans to reduce benefits. How to figure out if your retirement income is endangered.
  5. Professionals

    Accounting For Long-Term Liabilities

    CFA Level 1 - Accounting For Long-Term Liabilities. Learn the components of various long-term liabilities and the rules governing their accounting treatments.
  6. Financial Advisors

    How to Advise Clients with Frozen Pensions

    Financial advisors are on the front line in advising clients impacted by a frozen pension. Here's what they need to consider.
  7. Financial Advisors

    Pension Advances: What You Should Be Wary Of

    The terms some pension advance firms require can be costly. Here's how to be sure your clients aren't making bad decisions.
  8. Retirement

    The Pros And Cons Of Pension Maximization

    Pension maximization can be an effective solution to the single versus joint life payout dilemma that many retirees face. But, there are several factors, such as tax and investment matters, that ...
  9. Retirement

    How Pensions, Social Security Differ

    Both pensions and Social Security provide an income stream to retirees, but they differ widely on how they're structured and funded. Here's the lowdown.
  10. Retirement

    A Primer On Defined-Benefit Pension Plans

    Most of us will rely on a pension plan in the future, so it's best to know the details of the various plans before signing up.
RELATED FAQS
  1. Can I leave my pension to my spouse when I pass away?

    In most cases, an individual with a pension plan should have the option to leave at least a portion of his or her pension ... Read Answer >>
  2. Who bears the investment risk in 401(k) plans?

    Who actually bears the investment risk in a pension plan depends on the type of pension plan that is employed. In a broad ... Read Answer >>
  3. How do pay-as-you-go pension plans work?

    Learn what a pay-as-you-go pension plan is and how it is different from fully funded pension plans. Understand how public ... Read Answer >>
  4. Are Canadian Pension Plans inflation-protected?

    Learn about the Canada Pension Plan and how it adjusts its contributions and benefits each year for changes in inflation ... Read Answer >>
  5. How does a pension income drawdown work?

    Understand what a pension income drawdown plan is, and learn the current rules governing pension income drawdown plans in ... Read Answer >>
  6. How do Pay As You Go pension plans work?

    Learn how pay-as-you-go pension plans are different than fully funded pension plans and why some government plans are running ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center