teachers widowers pension

Stargazer57

Niggles wrote: »

This seems amazing to me.
Does this mean that if a woman is widowed by a male teacher who was the main earner and man is widowed by a female teacher who was the main earner and then these two people decide to co-habit then they lose both their pensions.

They don't lose their own pensions, if they had them. All they lose are the pensions they were due while they were widowed. If their former spouses (the teachers) had wanted to ensure that the pensions would continue after remarriage they would have made provision whilst they were alive.

TMFTP

seven-day-weekend wrote: »

I think it is quite fair actually, Pension provision should be for the partners in the new relationship to sort out.

Love-at-first-examination-of-assets-and-liabilities-to-establish-feasibility-of-relationship?

Oh, you old ROMANTIC, you!

It's a tricky one, in my opinion. Past decisions will have been made on assumptions for the future. If it's at the point where benefits are being paid, it's unlikely that the dependant has too much time to do anything meaningful in terms of future provision.

I'm also not sure how much actuaries build in to cater for remarriage / cohabitation when they're calculating the joint life aspect of a pension. If they're basing it on mortality alone, then it would seem reasonable to pay it to the point of death of spouse (or dependant)-at-time-of-death.

MattS

Every pension scheme is different. The Trustees and Administrators have an obligation to act according to the Trust Deed and Rules, and any actuarial assumptions should be based on the same. As always, check the rules before banking on anything - and be aware that they can't generally make any exceptions, no matter how unfair it seems.

seven-day-weekend

Stargazer57 wrote: »

They don't lose their own pensions, if they had them. All they lose are the pensions they were due while they were widowed. If their former spouses (the teachers) had wanted to ensure that the pensions would continue after remarriage they would have made provision whilst they were alive.

As I say, it seems fair to me that if you are no longer a widow/er (because of remarriage or co-habiting), then you should no longer be entitled to a widow/er's pension!

Andy_L

Generally these FS scheme rules were written "in the old days" where the wife would frequently have been a kept woman.
Changing the rules to reflect the changes in society would increase the cost of the scheme as they'd have to pay out more money. As Goldenyears points out that means higer employers and/or employees contributions

TMFTP

Andy_L wrote: »

Generally these FS scheme rules were written "in the old days" where the wife would frequently have been a kept woman.
Changing the rules to reflect the changes in society would increase the cost of the scheme as they'd have to pay out more money. As Goldenyears points out that means higer employers and/or employees contributions

Not if the assumption was that the "wife" was a "kept woman." In that case, they'd be assuming requirement to pay JL aspect of most pensions (as you're assuming the "husband" is the worker) - as women live longer.

If they were to take current society into account, there'd be more divorce, more remarriage after death - and therefore less requirement to pay on the male death. The annuity would be payable for fewer years, therefore would be cheaper.

TMFTP

seven-day-weekend wrote: »

As I say, it seems fair to me that if you are no longer a widow/er (because of remarriage or co-habiting), then you should no longer be entitled to a widow/er's pension!

Let's look at this another way.

Worker 1 dies 1 day before retirement. Widow(er) 1 gets death-in-service lump sum, and remarries the following week. Keeping full lump sum.

Worker 2 dies 1 day after retirement benefit commences. Widow(er) 2 remarries the following week and gets nothing.

Cost to scheme? Which assumptions are the scheme taking into account?

Stargazer57

TMFTP wrote: »

Let's look at this another way.

Worker 1 dies 1 day before retirement. Widow(er) 1 gets death-in-service lump sum, and remarries the following week. Keeping full lump sum.

Worker 2 dies 1 day after retirement benefit commences. Widow(er) 2 remarries the following weekand gets nothing.

Cost to scheme? Which assumptions are the scheme taking into account?

You are making the basic mistake of assuming that the assumptions determine the benefits, rather than the other way round.

Your worker 1/2 anomaly is a problem of benefit design. It's usually cushioned by the pension being guaranteed for a period, usually 5 years. with that in place the sharp discontinuity in benefit amount is reduced and tapers over the 5 year period. There's also usually a lump sum payable at retirement.

TMFTP

I think you're missing the point, Stargazer. We're assuming a Joint Life pension, with benefits payable to a spouse - NOT a single-life pension, where value is partially protected by a guarantee.

The suggestion is that "Joint Life" should mean "Joint Life unless you live with someone else". I assert that that is NOT the assumption made by actuaries when they're costing.

Stargazer57

This is an occupational scheme - so there's no such concept as a joint life pension. The member will get a pension. There will be an allowance for a contingent spouse's pension, of a certain fraction of the members pension, that may or may not cease on remarriage or cohabitation.
I know more than you do about assumptions made by actuaries in costing occupational pension schemes. Trust me.