If John dies before drawing on his PRSA, what happens to Shirley's PAO entitlement?

If John dies before drawing on his PRSA, what happens to Shirley's PAO entitlement?

• A. It becomes a debt on John's estate
• B. The PAO lapses without benefit.
• C. A transfer value is paid from the PRSA to Shirley, within 3 months of John's death
• D. The PRSA continues in her name

Answer: (C)

When a PRSA holder dies before drawing on a PAO, the benefit is not left as a debt on the estate nor does the PRSA automatically stay in the deceased’s name. Instead, the value tied to the PAO is paid out as a transfer value to a beneficiary’s PRSA, in this case Shirley’s, and the payment should be completed within a short regulatory window (three months). This preserves the member’s benefited option in a pension-friendly form for the surviving spouse, rather than resolving through the estate or letting the benefit lapse.

When a PRSA holder dies before drawing on a PAO, the benefit is not left as a debt on the estate nor does the PRSA automatically stay in the deceased’s name. Instead, the value tied to the PAO is paid out as a transfer value to a beneficiary’s PRSA, in this case Shirley’s, and the payment should be completed within a short regulatory window (three months). This preserves the member’s benefited option in a pension-friendly form for the surviving spouse, rather than resolving through the estate or letting the benefit lapse.