death in service pension

briankath

my sister died without leaving a will. she applied for early retirement due to ill health.she died before the pension was processed. she had the forms to fill in with a choice of a large lump sum and a smaller pension or a small lump sum and a larger pension as this had not been processed would this be classed as death in service?she nominated me as her beneficiary and that is signed and acknowledged . as stated,unfortunately she passed away before her pension could be processed and she did not sign any of the paperwork capita who is sorting out the pension is saying the pension must now go into the estate and not to the nominated person is this correct and if not how do i defend this .

ValHaller

The choice of pension options is irrelevant. The question is whether she signed an expression of wishes form at any time she was a contributing mmeber. This effectively puts the money in trust for the pension fund to do as they wish (technically) which will be to do as the expression of wished form says. If she didn't do the form, then the money goes to the estate.

securityguy

You need to unpick the various items here.

If you die while employed, you may receive a death in service benefit. It's life insurance, pure and simple. If there's an expression of wishes form, then it's usually followed, otherwise it goes to the estate. Note: in service. If you're retired, it's not operative. Death in service cover probably ceases with your last payslip.

When you come to claim your pension, you have some choices, which may vary depending on your pension scheme. But the most common is that you can take about a third (35%?) of your pension pot as a tax-free lump sum, and therefore get a reduced pension. There are many situations where this is a good deal. Obviously, if you do that, and then die, your estate gets the lump sum, because it's your money. Expression of wishes forms are irrelevant here: it's yours, then it's your estate's.

There is also a widow's/widower's pension in many schemes, usually half. That doesn't go into the estate, and if there isn't a widow or widower (or, occasionally, children) then the benefit simply isn't paid (yes, that's unfair, in that single people get less value for their contributions).

So in this case, if she had ceased to be an employee, there's no death in service benefit. If she was still on the payroll, the death in service follows the expression of wishes, if relevant, or goes into the estate. The question of what happens if the pension lump sum hasn't been signed or decided on is might be tricky. And the pension itself, if the deceased is unmarried, probably dies with them.

briankath

ValHaller wrote: »

The choice of pension options is irrelevant. The question is whether she signed an expression of wishes form at any time she was a contributing mmeber. This effectively puts the money in trust for the pension fund to do as they wish (technically) which will be to do as the expression of wished form says. If she didn't do the form, then the money goes to the estate.

she did sign a wish for it t go to me and the pension people have a copy

withabix

Was she still an employee or had she STOPPED WORKING?

That may be important.

As it is being dealt with by Capita, bear in mind that the people you speak to are likely to be monkeys who used to be civil servants.

You will need to wait for some organ grinders to get involved.

briankath

difficult she was off long term sick and got a p45 but she was still receiving sick pay

securityguy

brian/kath wrote: »

difficult she was off long term sick and got a p45 but she was still receiving sick pay

Are you sure? It would be uncommon to receive a P45 and yet be being paid long-term sick by an employer. You might be receiving statutory sick pay or payment from a union sickpay scheme, but once you've been issued a P45 you aren't an employee, and it would therefore be unusual to receive a death in service benefit. Cover for death in service would normally cease with your last payslip (if it's provided directly by the employer) or your last pension contribution (if it's provided by the pension scheme) --- normally, of course, these two event are the same.

And as I said, you need to untangle the death in service benefit from the pension lump sum: they're different money, from different sources, with different rules. And to further complicate matters, some pension schemes have a minimum payout: if you die two days after starting to receive a pension, you get some number of years' pension paid to your estate, reflecting that you got very poor value for forty years' contributions.

It sounds to me that you need to talk to someone who understands your sister's pension scheme and employment, either her former employers' HR department or, if she was a member, her union. Are you the executor of her will, and did you previously perhaps have a power of attorney? If so, that should remove any data protection and confidentiality issues.

brian/kath wrote: »

she did sign a wish for it t go to me and the pension people have a copy

What is "it"? If you mean a death in service benefit, are you sure there is one, given she had received a P45?