Dying before taking any benefits.

EdInvestor

..it now sounds as if they have refused to make ANY payment to the estate which, to be honest, makes the situation a whole lot stranger. I would have expected at least the return of the deceased's contributions.

Pension benefits are not normally paid into a person's estate - they are paid direct to the beneficiary at the discretion of the trustees and are thus free of inheritance tax.

mountainofdebt

I understand that you can nominate someone to receive the lump sum/death benefit but what happens if you don't......surely the fund built up not only by employer contributions but by personal contributions as well doesn't disappear???? If only the personal contributions had been returned then that would have been understandable.

I apreciate there has to be rules but when something like this happens, it really does make you wonder if paying into a pension is a good idea. With hindsight if the pension does disappear on the say so of a stranger then my relative would have been better off enjoying the money personally than this happen.

EdInvestor

mountainofdebt wrote:

I understand that you can nominate someone to receive the lump sum/death benefit but what happens if you don't..

Yes, normally you are required to nominate someone. The trustees may already have paid out the benefits to the nominated beneficiary.AFAIK there would be no requirement to inform anyone else about the matter.

But I am not an expert on this, perhaps our other occupational pension experts will comment.

dunstonh

Nomination is just as expression of wish. The trustees get to choose where the money goes. You are just telling them where you would like it to go. If they disagree with you, then they will overule you. However, you wouldnt know about it as they review it on death and you arent exactly in a position to challenge them then.

If there is no expression of wish, then the trustees decide based on circumstances. The fund is never lost. It is always paid out to someone

Boswell_2

Mountain - I am so sorry to hear of your loss.

For the company I work for if there is a death in service, the trustee looks at the expression of wish form as well as other evidence such as wills and evidence from relatives and partners and then makes the decision. It is a discretionary payment because it can be paid without inheritance tax but in reality our trustee always pays it. If there is no eow form, no will, no spouse, no partner, then parents, sibilings and cousins are considered.

Once the payment is made they never pass on information about the recipients or the amounts. If asked, the trustee will confirm that the payment was made in accordance with the employees wishes or scheme rules as appropriate. It might be worth writing to the administrators of the scheme yourself to ask for this information rather than the solicitors.

mountainofdebt

dunstonh wrote:

The fund is never lost. It is always paid out to someone

That is what so odd - it appears that this is exactly what has happened in this case.

The letter they wrote simply stated that they wouldn't be making a payment to the estate ....no explanation no nothing.

I'm sure that alot more letter writting is going to be involved before we get to the bottom of this but when we do I'll let you know of the outcome.

dunstonh

They dont make a payment to the estate. They make a payment direct to the beneficiary. There may be a bit of miscommunication there.

mountainofdebt

I know this is cheeky but could I pm you with a question we have after reading the (very lengthy!!!) scheme booklet???

dunstonh

You can PM me. Many do and havent accused anyone of being cheeky....yet

EdInvestor

It's the original person (now deceased) who nominates who is to get the pension fund death benefit.Then the trsutees pay the money to that nominated person.This person does not have to be an heir or related to the deceased in any way.

The pension fund and the disposal of it is quite separate from the deceased's estate and his heirs have no right to know what he decided to do with his pension fund.

Of course in most cases the deceased will have nominated his spouse or children as his beneficiaries and the question will not arise.