What death benefits are available?
These are typical benefits and not always in all schemes.
DB Schemes
The member does not choose which benefits are payable on death, they are defined in the scheme rules and depend on the member status in the scheme i.e. active, deferred or retired.
As mentioned earlier when we looked at joining a scheme, the member should complete an Expression of Wish form to assist the trustees in distributing any lump sums.
Death in Service
- Multiple of salary as a lump sum
- Return of member contributions
- Spouse/Civil Partner/Dependant’s Pension (percentage of salary or member’s pension).
Death After Leaving
- Return of member contributions
- Spouse/Civil Partner/Dependant’s Pension (percentage of salary or member’s pension).
Death After Retirement
- Balance of 5 year guaranteed pensions
- Spouse/Civil Partner/Dependant’s Pension (percentage of salary or member’s pension).
DC SchemesAgain these are typical benefits and are not always in all schemes.The main difference from a DB scheme is that any death benefits payable depend on whether the member is in receipt of an annuity and the options chosen when the annuity was purchased.Death in Service
- Multiple of salary as a lump sum
- Return of the fund
or - Fund value used to provide a Spouse/Civil Partner/Dependant’s Pension.
Death After Leaving
- Return of the fund
or - Fund value used to provide a Spouse/Civil Partner/Dependant’s Pension.
Death After Retirement
- Depends on the benefits the member chose when purchasing the annuity on retirement. It may be that nothing is payable.
Flexi-access Drawdown
If a member with FADD dies the beneficiary can be a dependant, nominee or successor.
Dependant
- Spouse or Civil Partner
- Child up to age 23
- Person who was financially dependent on the member at the time of death.
Nominee
- Any individual other than a dependant who is nominated by the member.
Successor
- Anyone nominated by a previous beneficiary i.e. a person who inherits unused drawdown funds on the death of a dependant, nominee or successor.
The options available to a member include:
- Dependant’s Pension
- Dependant’s Drawdown Pension
- Nominee Drawdown Pension
- Flexi-Access Drawdown Lump Sum Death Benefit
- Charity Lump Sum Death Benefit
