Did you know that the Scheme gives financial security to your family in the event of your death? These benefits can be a lump sum or pension, or a mixture of both.
You can find out who might be eligible to receive death benefits and how they would be paid. You can also let the Trustee know who you would like to receive your benefits by completing a Nomination Form.
The pensions described under this section increase during payment in the same way as the member’s pension would have increased.
Protecting your family
Does my Spouse receive a pension?
If you die before you retire from the Scheme, your Spouse will usually receive a pension equal to half of your deferred pension, increased by the appropriate inflation up to the date of your death.
If you die after you retire from the Scheme (either on good or ill health), your Spouse will usually receive a pension equal to half of the pension you were receiving at the date of death (ignoring any amount you may have swapped for cash).
Please see below for some additional rules that may apply to you, depending on your personal circumstances.
If you get married after you retire...
If you marry after you have started receiving your pension, upon your death, your Spouse will receive a pension based only on the pension you earnt up to 5 April 2003. Any Guaranteed Minimum Pension (GMP) you earnt after 5 April 2003 will be included in the calculation of your Spouse’s pension.
If you are separated from your Spouse...
If you are separated from your Spouse at the time of death, the Trustees may decide that a Spouse’s pension is not payable (subject to certain minimum pensions which have to be paid by law).
If your Spouse is younger than you...
If you die leaving a Spouse, Life Partner or Dependant (other than an Eligible Child) who is at least 15 years younger than you, the pension payable may be reduced. If you would like further information on the reduction, please contact the Pensions Department.
What happens if I have a Life Partner?
If you have a Life Partner when you die, but you are not married, they will receive a pension equal to a Spouse’s pension.
The Trustees decide whether someone meets the definition of Life Partner, and full details are available from the Pensions Department. In essence, the Trustees need to be satisfied that you had a relationship which closely resembled marriage.
Will my children and dependants get a pension?
If you die unmarried, and do not have a Life Partner but do leave one or more dependants, a pension equal to the Spouse’s pension may be shared amongst your dependants, as decided by the Trustees.
If you die leaving Eligible Children, a pension will be payable to each child (up to a maximum of four children). This is payable in addition to any Spouse’s or Life Partner’s pension.
The Trustees decide the amount of the pension paid to each child, usually 25% of the Spouse’s pension for each Eligible Child.
If a Spouse’s or Life Partner’s pension is not payable, the amount of pension payable to Eligible Children is usually increased.
If you have a Spouse or Life Partner and other Dependants...
If you have a Spouse and one or more Dependants when you die, the Trustees may reduce the pension payable to your Spouse in order to pay a pension to one or more of your Dependants. The total pension payable to your Spouse and Dependant(s) would be equal to the pension payable to your Spouse, if there were no Dependant(s).
William died leaving a Spouse and one Dependant. The total Spouse's pension was £15,000 and the Trustees, having looked at the detail of William’s circumstances before he died, took the decision to pay a pension of £10,000 p.a. to his Spouse and £5,000 p.a. to his Dependant.
Please note, the Trustees decide how the pension is paid amongst the Spouse and Dependant(s). If you feel that you have personal circumstances where this may apply, please let the Pensions Department know, and what your wishes are in the event of your death. The Trustees can then take your wishes into account.
What if I have no Spouse/Life Partner or dependent children?
If you have no Spouse/Life Partner or dependent children when you die, the benefits payable would be a return of your contributions.
What happens if I die before payment of my pension has started?
Your contributions, including any Additional Voluntary Contributions and any benefits transferred from a previous scheme, will be paid as a lump sum. The Trustees have the discretion to decide how these benefits are paid out, and to whom.
A pension may also be payable, equal to half of your deferred pension, increased by inflation up to the date of your death.
What if I die as a pensioner?
What happens if I die within five years of taking my pension?
If you die within five years of starting your pension, there will be a lump sum payable (currently tax free). This will be the amount of pension which would have been paid over the rest of the five year period (based on the pension you were receiving at the date of death).
Five year guarantee example:
David had been retired for 3 years, when he sadly passed away. His pension was £10,000 p.a. when he died.
There are two years left of David’s five year guarantee (as he had already been receiving his pension for three years). This means that two years of his pension is payable as a lump sum.
This is 2 x £10,000 = lump sum of £20,000
What happens if I am receiving an ill health pension and die before age 65?
If you took your ill health pension from active status, and you were to die before 65, there would be a lump sum payable of 4 x Final Pensionable Earnings, less:
- Any cash lump sum taken at retirement;
- Any lump sum payable as part of the five year guarantee.
Who gets my benefits if I die?
The Trustees have the discretion to decide who receives any lump sum payable from the Scheme in the event of your death. They also have the discretion to decide whether any spouse’s pension should be shared with other dependants you may have.
Helen completed her nomination form in 2010 and nominated her husband to receive her death benefits. Helen got divorced in 2014, and unfortunately passed away suddenly a year later.
Helen’s personal circumstances had clearly changed since she last completed her nomination form, which made it difficult for the Trustee to decide who should receive her benefits. This meant the payment of Helen’s benefits were delayed, and may have been paid differently if she had kept her nomination form up to date.
Actions to take:
We understand that your nomination form may not be at the front of your mind after a significant life event, but please remember to complete a new form if your personal circumstances and/or wishes change. It is also important to remember that the choice of beneficiary for your death benefits is ultimately the Trustee’s decision, having taken into account your wishes and personal circumstances.