Pension fund Bankruptcy

brad73

My mother sadly passed away 3 months ago, she had been paying her pension for 22 years and had only been drawing her pension for 18 months. We recently found that her pension had been passed on to the Pension Protection Fund who have informed us they will not be paying any death benefits to us because we are over the age of 23. I find this quite shocking and they just seem to stonewall you when you ring them and offer no further information. If there's anyone who could advise me I'd very much appreciate it.
Brad73....

Cyberman60

Blame Labour and Gordon Brown whose removal of dividend tax credits from 1997 onwards destroyed final salary pensions in the private sector by removing approximately 150 Billion pounds compounded over the past 17 years from pension schemes. A scandal indeed, but people voted for the wasters. :mad:

The PPF was set up by Labour to try to rectify some of their own mess !!!

Daniel54

brad73 wrote: »

My mother sadly passed away 3 months ago, she had been paying her pension for 22 years and had only been drawing her pension for 18 months. We recently found that her pension had been passed on to the Pension Protection Fund who have informed us they will not be paying any death benefits to us because we are over the age of 23. I find this quite shocking and they just seem to stonewall you when you ring them and offer no further information. If there's anyone who could advise me I'd very much appreciate it.
Brad73....

Sorry for your loss

Unfortunately it is perfectly normal for a DB scheme in payment to have no death benefits for non dependent children over the age of 23 ( age may differ by scheme) .This is true whether the pension is in the PPF or not.To be sure,you may wish to consult the scheme rules for your mother's pension,but it would seem likely they are being correctly applied

Ignore the total bilge from Cyberman

dunstonh

I find this quite shocking

I'm afraid that is quite normal for defined benefit pension schemes. Death benefits on these tend to be spouse and children under age 23 (some exceptions apply). This is not to do with the PPF and nothing do with the Labour party in 1997.

Death benefits on money purchase schemes can be more favourable but these tend to require higher contributions from the individual and provide a lower income than a defined benefit scheme (on a cost/benefit basis). So, whilst the beneficiaries on death would get more, the person, whilst living, would get less.

If there's anyone who could advise me I'd very much appreciate it.

There is nothing to advise you other than to say its normal. It is a package of defined benefits that is bought. Not a fund of money.

Sorry for your loss.

kidmugsy

It's the mutual insurance aspect of DB pensions - those who die early subsidise those who die late. There's nothing the least shocking about it.

System

One result of recent liberalisation of pension rules is that everybody has been encouraged to think in terms of "my pension pot" and the possible uses to which this might be put.
Unfortunately for many schemes, to which the new rules don't apply, there is no such thing as a pot. It is simply an insurance scheme - people who don't live long in retirement receive less than those who do.

The insurance extends to dependents. Widows are dependents, children under 23 are dependents. But others are not, so cannot be beneficiaries.

I'm afraid there will be lots of people who gradually realise that these changes do not apply to them.

StevieJ

Cyberman60 wrote: »

Blame Labour and Gordon Brown whose removal of dividend tax credits from 1997 onwards destroyed final salary pensions in the private sector by removing approximately 150 Billion pounds compounded over the past 17 years from pension schemes. A scandal indeed, but people voted for the wasters. :mad:

The PPF was set up by Labour to try to rectify some of their own mess !!!

When did Osborne reinstate the tax credits, I must have missed that one?

Cyberman60

StevieJ wrote: »

When did Osborne reinstate the tax credits, I must have missed that one?

How could he, and anyway those pensions were past help by 2010 when the Coalition were elected ? We are still trying to reduce the deficit Labour also bequeathed us. Labour incompetence has no limits. :rotfl:

Pollycat

Brad73
I was in a DB scheme (a pretty good one) and death benefits were only applicable if you died in service.

One thing my scheme did have was that if you died within 5 years of receiving your pension the balance of the 5 years pension was paid out in a lump sum.

So if I'd died in the same timeline as your Mum, my N-o-K would have received 42 month's worth of pension payments.

TBH, it does sound like the rules have probably been applied correctly.

I notice you say you are being stonewalled when you ring them - have you tried writing?

mania112

https://www.ppfonline.org.uk/mycompensation/ssp/pensionprotectionfund/ppf_compensat_survivors.pdf

As you will see in this booklet (and as mentioned above), a continued benefit is only payable to a spouse/civil partner.

Children can receive a benefit if they're under 23.

Besides this, the pension ceases on death.

Although there are massive advantages to a defined benefit / final salary pension, leaving benefits to family (besides a spouse) is not one of them.

P.S - The scheme being taken over by the PPF doesn't affect this. It would have been the same if it remained where it was.