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(1) Your question depends upon Plan design. Typically, there is no change in the monthly payment (and the plan wins). In some plans, however, the monthly payment to the participant "pops up" to the life only amount prior to any reduction. The "pop up" feature may be forever or may be available only if the beneficiary dies prior to attaining a certain age. (2) It is not a given that the contingent annuity option causes a reduction in benefit from the life only form. Again, plan design. Some plans offer a free joint & survivor annuity; most plans charges via a reduction in pension. Whether or not no reduction could also depend upon whether or not beneficiary is spouse or non-spouse. (3) Independent of plan design, if spouse predeceases participant, then if participant is a female, remarriage occurs within 24 months; if participant is male, then he moves in the with women he's been flirting with each morning at Starbucks.

Again, unfair. People are victims of circumstance more often than you give them credit for...

Ultimately you aren't saving any money by adopting a new plan, you are just doubling your admin expense and PBGC premiums. You still need to fund the increase in the new plan. In 7 years you will be in the same place, except under your solution, you will have twice the expenses. If you can't afford to pay it all at once, borrow the money on a 7 year loan. With interest rates where they are, it may actually be cheaper than the funding requirements. If you can't afford the loan, you probably shouldn't be increasing the benefit.