What is my son entitled to?

UncleJimb0

Hi all,

My husband and father of my son very sadly passed a few years ago. We were not together when he died and sorting out my husbands pension wasn't exactly the first thing on my mind.

It turned out my son (8 years old) was entitled to his pension fund and currently receives a small amount of money each month from this fund.

However, the administrators of the pension were very cagey and reluctant when dealing with them. We have never been told how much money is in the pension fund and what decision was made to determine why my son gets what he currently does each month.

Being truthful the monthly figure isn't very much at all and we could really do with a little extra to help with school club fees.

Am I within my rights to ask the administrators how much is in the fund? Is my son entitled to a little more each month? Can he have a lump sum now or does he have to wait until he's 18?

I don't really know what our options are and I don't really believe much about what the administrators say

Hope you can help x

Proxy

It is likely that the administrators have bought a child dependent's annuity with this fund.

The fund amount at present is not obtainable - only the amount that was originally used to purchase it in the first instance.

There would be no chance of changing the amounts payable (unless it is escalating as part of the conditions of the annuity) and there is unlikely to be a lump sum at the end. The child will continue to receive the same regular payments until the specified age (18, 21, 23, whatever!)

jamesd

Was the father receiving a pension income himself at the time of his death? What type of pension was it, final salary or similar defined benefit, or money purchase (the father chose his own investments)?

What the benefits are for a survivor in this case depend on the type of pension scheme and its rules. For example, mine would pay a child's pension until age 18 and the whole lump sum value in addition, to whoever was the nominated beneficiary. However, such payments can be modified by the pension scheme trustees if they have a sufficient reason, such as perhaps a perceived priority need to support other children or a spouse. That's more likely if the other children or spouse arrived after he'd expressed his wish to the pension fund trustees.

Assuming that the payments will continue for ten years you can get an over-estimate of the pension pot value by multiplying the monthly payment by 75. That will probably be higher than the actual value but should give you some idea of the maximum value it had. The highest possible value for ten years would be 120 times the monthly payment but that ignores the extra money that is available from investments. So an unrealistically high maximum value would be £12,000 if the monthly payment is £100.

A little extra is not an achievable result. At this point it's probably not achievable to obtain a lump sum payment either. But it is worth asking about the scheme rules, what the value was at the time of death and what discretion was used by the trustees, if any.

dunstonh

However, the administrators of the pension were very cagey and reluctant when dealing with them. We have never been told how much money is in the pension fund and what decision was made to determine why my son gets what he currently does each month.

You say pension fund which suggests a money purchase scheme. However, in those cases a dependents income would not be bought but a lump sum paid out (unless there is protected rights). If it defined benefit then an income could be payable but that would be in line with the terms set in the scheme booklet.

Am I within my rights to ask the administrators how much is in the fund?

It doesnt sound like a fund. It sounds like a defined benefit scheme.

Is my son entitled to a little more each month?

assuming defined benefit scheme, it is the scheme rules that set the entitlement and thats based on years of service and membership of that scheme.

Can he have a lump sum now or does he have to wait until he's 18?

It's unlikely that they would commute the income as a lump sum unless its a very small amount. Even then its taxable and commutation can sometimes see a reduction being made.

I think the first thing we need to know is if the pension is money purchase or defined benefit. You seem to be working on the assumption its money purchase but what you describe sounds like defined benefit.