Pop-Up Option

AAA

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.

INVESTOPEDIA EXPLAINS '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. Integrated Pension Plan

    A pension plan that is tied to an individual's Social Security ...
  2. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  3. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  4. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
  5. Current Service Benefit

    The amount of pension benefit accrued by an employee who had ...
  6. Benefits Payable Exclusion

    An insurance policy exclusion that removes the insurer’s responsibility ...
RELATED FAQS
  1. I retired and transferred part of my pension distribution to a Roth IRA. If I am ...

    The age 55 exception applies only to distributions from qualified plans and 403(b) accounts. Once the assets have been credited ... Read Full Answer >>
  2. How does a pension income drawdown work?

    While there are similar drawdown plans in the United States, a pension income drawdown plan most commonly refers to a specific ... Read Full Answer >>
  3. What is fiduciary liability insurance, and what are its benefits?

    Under the Employee Retirement Income Security Act (ERISA), any individual who manages a employee benefit or pension plan ... Read Full Answer >>
  4. Why are insurance companies and pension funds considered financial instruments?

    Insurance policies are widely considered to be financial instruments. Pension funds may contain many different types of financial ... Read Full Answer >>
  5. How should I invest the money I keep on my IRA?

    For individuals who are just starting to save, certificates of deposit can be a good place to start, but the interest rates ... Read Full Answer >>
  6. Why choosing the right investment advisor is crucial for your portfolio's health

    Just as finding a good mechanic will help keep your car running smoothly, finding a good broker or financial advisor can ... Read Full Answer >>
Related Articles
  1. Retirement

    The Investing Risk Of Underfunded Pension Plans

    Determine the risk to a company's EPS and financial condition resulting from an underfunded pension plan.
  2. Options & Futures

    An Estate Planning Must: Update Your Beneficiaries

    Life changes make it time to rewrite your plan's designations.
  3. Investing Basics

    Top 6 Uses For Bonds

    Individuals and institutions can use bonds in many ways: from the most basic, such as for preserving principal or saving and maximizing income, to more advanced uses, like managing interest-rate ...
  4. Budgeting

    The Demise Of The Defined-Benefit Plan

    Experts are making bleak predictions for your post-work years. Be prepared and plan for your future.
  5. Mutual Funds & ETFs

    10 Retirement-Wrecking Moves

    Don't let these common mistakes put a crack your nest egg.
  6. Retirement

    How To Cure An Ailing 401(k)

    High-cost, outdated plans can prevent your retirement portfolio from thriving.
  7. Investing

    How To Evaluate Pension Risk By Analyzing Annual Costs

    Learn how to assess whether a company's pension plan is posing more risks than what the footnotes indicate.
  8. Retirement

    Understanding Defined Benefit Pension Plans

    An employer-sponsored retirement plan where employee benefits are based on a formula using factors such as salary history and duration of employment.
  9. Entrepreneurship

    Why Small Business Owners Need Financial Advisors

    Small business owners are too busy to effectively manage their own money. That's why a financial advisor can be a big help.
  10. Personal Finance

    5 Signs You're Getting Bad Financial Advice

    Use good judgment and practice due diligence when contracting with professional money managers and advisors.

You May Also Like

Hot Definitions
  1. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  2. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  3. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  6. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
Trading Center