Although the 1974 Employee Retirement Income Security Act encouraged retirees to choose pension payout plans that provided for their dependents, a recent survey reports that most small company retirees choose payout options with no survivor provisions.

The study, conducted by Charles D. Spencer & Associates of Chicago, found that in the 12,153 small companies surveyed, only 21.9% of the retirees chose some type of survivor pension option. The vast majority, 79.1%, chose lump-sum distribution -- taking the total sum owed to them at one time.

Why are pension payout plans with survivor options less common among small company retirees? "Some people who retire from small firms," says Spencer associate editor Ross D. Spencer, "take the lump-sum distribution option so that they can find their own way to manage their retirement income." More often, the employee covered by a small company plan is himself the owner of the company, Spencer suggests: "He's basically an entrepreneur. A retiring small business owner will take the money he put aside for retirement because he wants to start another business."