What happens if I die after I leave the Scheme, but before taking my pension?
If you leave the Scheme with a deferred pension and die before retirement, a refund equal to your contributions to the Scheme (without interest) will be payable to your beneficiaries as a lump sum.
In addition, a pension equal to 50% of your deferred pension revalued to the date of your death will be paid to your surviving spouse or civil partner. 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.
Children’s pensions are not paid following the death of a deferred member.
If a refund payable on death as a deferred member exceeds the lump sum and death benefit allowance, the excess will be subject to income tax. Please click here for more information about pension taxation.
What happens if I die during my retirement?
If you die after you’ve started to receive your pension and you are survived by your spouse or civil partner, a pension of 50% of your pension, calculated before any tax-free cash was taken, will be paid to your spouse or civil partner.
If you are under age 75 and you die before five years’ pension instalments have been paid, the balance of the outstanding instalments will be paid as a cash sum (the pension guarantee). So, for example, if you died three years after starting to receive your pension and the pension in payment was £6,000 per year, the lump sum would be calculated as follows:
| Your monthly pension | x | Number of months remaining on 5 year guarantee |
= | Total lump sum death benefit |
|---|---|---|---|---|
| £500 | 24 | £12,000 |
If you die more than five years after you retired, then no lump sum is payable.
If you have retired early on the grounds of ill health and you die before your normal retirement date, the lump sum life assurance benefit of three times your Pensionable Earnings when you retired will be payable. If your retirement benefits and the continued life cover exceed the lump sum and death benefit allowance, there will be a tax charge. The spouse’s or civil partner’s pension of 50% of your pension calculated before any tax free cash lump sum was taken will also be paid, but the pension guarantee will not.
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.
Children’s pensions are not paid following the death of a pensioner member.