Help needed concerning bereavement and work pensions!

LUCY7710

On September 7th 2006 my step-dad was diagnosed with Lung Cancer. The tumour covered 3/4 of his chest and was in-operable although chemotherapy was offered and accepted by him he never lived to start the treatment, he passed away on September 25th aged 51.
My mother and he had been together for 27 years and he was the only father I had ever known but because they never married and his will was only partly written in the eyes of the law we were as good as strangers, we weren't even permitted to register his death, we had to ask his brother to come with us as his next of kin, as if losing him so fast and un-expectedly wasn't bad enough! Then to cap it all off we have to deal with AXA, the company my step-dads pension (which he took out through his employer) was with. Many years ago when 1st joining the pension scheme and filling out the application forms, he named my mother as sole beneficiary should anything happen to him, all he ever wanted was to ensure she was taken care of if the time ever came that he was no longer with us. He specifically told the representative present at the time that my mother and he weren't married but they had been together for over 20 years and he asked if this would have any bearing upon the final payout, he was told no it would not! It did not matter as he had named her as his sole beneficiary, plus the length of time they had been together, it would be dealt with as if they had married.
The details for payout were a £15,000 lump sum and a monthly payment of £400 for the rest of her natural life. The company upon the death of my step-dad paid out, (to my mother) the lump sum of £15,000 no problem but have since refused to honour the monthly payments, now stating because they weren't legally married she isn't entitled to them.
Can they do this?
My mam works only part-time, her wages average at £100 per week, the outgoings are double that and she is making herself ill with worry. I don't understand how the pension company can acknowledge and adhere to my step-dads wishes for all monies to be paid to his life partner and pay the lump sum only to contradict itself and deny she has and right to the monthly payments? We have sought legal advice but fall at the first hurdle, how do we finance the claim? Its a heartbreaking situation, we can't financially afford to fight a big insurance company but if we don't we might lose the house! Please can anyone help?

Thank you so much for taking the time to listen.

mountainofdebt

I'm sorry that not only have you lost your step-dad and having this trouble to boot.

The first thing to do is to check all the paperwork that your step-dad was given at the time that he took out the policy and see exactly what the lump sum represents. Was it for example returning the value of your step-dad's pension fund value or a death in service payment.

Next check what the wording of the policy is as this will presumably form the basis of any compliant against the pension company.

Once you are sure of your facts then initiate the company's compliant proceedure and if needs be escalate it up to the pension obudsman (?sp).

We had a similar problem with my late FIL's pension company but that turned out to be a mis-communication problem which was easily resolved.

Hopefully your situation will be as easy to resolve.....btw is your mum receiving all the benefits she's entitled to?

LUCY7710

Thank you for that ill get the paper work out first thing tomorrow. My mam isnt receiving any benefits, we didnt think she would be entitled to any. How would we find out if she is able to claim some type of benefit?

mountainofdebt

Go to www.entitledto.co.uk and she should find out what benefits, if any she can claim.

dunstonh

Duplicate thread running.
http://forums.moneysavingexpert.com/showthread.html?t=527784

Can board guide combine and move to pensions please.

dzug

I hate to say it, but it is possible that what has happened is correct. It would be in many schemes.

The death benefit can be payable to whoever the pension fund trustees decide to pay it to - which is 99.99% of the time the person your step dad nominated it to be paid to.

The continuing pension, however is only payable to a widow - and in some cases for the benefit of under 18 children.

I'd take #2's advice and investigate very closely though. It's the rules of your particular scheme that count, not general practice.

dunstonh

Seeing as the duplicate thread hasnt been spotted to merge, I will paste my post from that one onto this thread.

The details for payout were a £15,000 lump sum and a monthly payment of £400 for the rest of her natural life. The company upon the death of my step-dad paid out, (to my mother) the lump sum of £15,000 no problem but have since refused to honour the monthly payments, now stating because they weren't legally married she isn't entitled to them.
Can they do this?

Can you clarify the type of pension it is and if it had commenced or not (i.e. was it still invested or was your step dad taking an income?

If the pension has not been commenced and is made up of ordinary rights, the value is paid out in full with no income paid (as full value is distributed).

If the pension has not been commenced and is made up of protected rights (from contracting out), then the legally married spouse gets an income. If there is no legally married spouse then the lump sum is paid as per nomination. No income is payable as full lump sum value is paid out.

If the pension had commenced, it would depend on the type of annuity purchased and the terms chosen. Protected rights will only pay out to legally married spouse.

I don't understand how the pension company can acknowledge and adhere to my step-dads wishes for all monies to be paid to his life partner and pay the lump sum only to contradict itself and deny she has and right to the monthly payments?

The insurance company will act within the rules laid down by the Govt and the instructions given to them by the policyholder (providing they are within the rules).

We have sought legal advice but fall at the first hurdle, how do we finance the claim?

Why are you seeking legal advice? A solicitor isnt going to know the rules regarding pensions.

Its a heartbreaking situation, we can't financially afford to fight a big insurance company but if we don't we might lose the house! Please can anyone help?

Have you spoken with an IFA?

The chances are that there is no error here and AXA have acted correctly.

The nominated beneficiary is not legally binding and it is upto the trustees who they pay the pension too. However, most times they will follow the instruction. As a money purchase pension (which it sounds like as an insurance company is used), there would only be a lump sum benefit on death if the pension had not commenced. There would never be an income unless there was protected rights involved. In which case the married spouse gets it. If no married spouse, it is paid out as a lump to the named beneficiary.