What happens if I die while I’m still employed and paying contributions to the Scheme?
A lump sum of three times your Pensionable Earnings plus the return of the contributions you have paid to the Scheme and the value of any AVCs will be paid.
For example, if you have Pensionable Earnings of £23,500 plus an AVC fund valued at £7,000 and you paid contributions of £15,000, your total lump sum death benefit would be worked out as follows:
| Pensionable Earnings x 3 | + | Refund of contributions | + | Return of value of AVCs (if applicable) |
= | Total lump sum benefit |
|---|---|---|---|---|---|---|
| £23,500 x 3 | £15,000 | £7,000 | £92,500 |
In addition, the Scheme will also pay pension benefits as explained below:
A pension will be paid to your spouse or civil partner of 50% of the pension which you would have earned had you remained in the Scheme until your 60th birthday, with no change in your Pensionable Earnings.
If you die in service between the ages of 60 and 65, the spouse’s or civil partner’s pension will be 50% of the pension which you had earned up to the date of your death.
In addition, the Scheme will pay a child’s pension for financially dependent children up to the age of 18 (or 23 if they are in full-time education). The pension for one child will be 50% of the spouse’s pension described above. If you have two or more children, their pensions will be calculated as described above, up to a total of 100% of the spouse’s pension.
If you are not married or in a civil partnership, but are living with a partner who is financially dependent or interdependent on you at the time of your death, then a pension may be paid at the discretion of the Trustee.
If a lump sum payable on death in service exceeds the lump sum and death benefit allowance, the excess will be subject to income tax. To read more about pension taxation, please click here.