What happens to a pension when someone dies?

lewis321

Hello all.

Just after some advice regarding a private pension my late dad had for some years. I'm not entirely sure if the pension stops when the person dies or not?

Does anyone know?

Thanks Lewis.

molerat

It all depends on the type of pension, scheme rules and if the pension was in payment. More information needed.

dunstonh

I'm not entirely sure if the pension stops when the person dies or not?

Pensions basically have two periods. The accumulation stage where you build up your pension or benefits and then the decumulation stage where you take the income. Often different products are used for both stages. e.g. a personal pension in the accumulation stage and an annuity in the decumulation stage.

Death benefits will depend on the options of the scheme/plan. So, we need to know whether this was a pension in payment or in the accumulation stage, what type of pension it was and what the death benefits were.

Linton

If the private pension is in payment as annuity then what happens to it when the pensioner dies depends on what was agreed when it started - typically the pension would simply stop or there would be a spouse pension of say 50%. Pensions are designed so that those people who die early subsidise those who die late.

If the pension pot had not been used or was in drawdown then the lump sum goes to beneficiaries outside the estate either tax free or taxed as income.

lewis321

Thanks for the replies.

Info on the type of pension is sketchy because I don't have all the info. What I do know is the pension was started at Vauxhall, went to Johnsons Dry Cleaners and then to Johnsons Apparelmaster. He passed at 63 while claiming benefits due to ill health and not sure if he was or could have claimed on the pension at that age.

On a side note. When I contacted Johnsons Apparelmaster they told me the scheme administrator JLT had tried to contact the next of kin, me, but were unable to for whatever reason, odd because life insurance had no problems? I then contacted JLT and they said nothing due but gave no reason and didn't respone to further enquiries?

Silvertabby

You need to ask them why there is nothing due. I hate to ask this - but (from my experience as a Local Government Pensions administrator ) is it possible that another family member got there first?

xylophone

The likelihood is that this was a DB pension where administration had been turned over to JLT?

He passed at 63 while claiming benefits due to ill health and not sure if he was or could have claimed on the pension at that age.

The OP does not seem to know whether or not his late father was actually receiving a pension when he died.

I would have thought that the deceased's bank/BS statements should be checked for this.

I am hazarding a guess that the deceased did not leave a widow.

If a pension was in payment and there was no widow/eligible dependent child, it is almost certain that the pension died with the father.

On a side note. When I contacted Johnsons Apparelmaster they told me the scheme administrator JLT had tried to contact the next of kin

This would seem to indicate that JLT knew that the father had died.

How did they know since it would appear that the OP had not been in contact with them?

Had a pension payment been returned by the deceased's bank?

lewis321

Hello all. I think silvertabby has the same idea as me, write back and ask why nothing is due. I'm almost positive no other family member got to it first. He was divorced at the time of his passing and I was the only name on the will.

What I think I'll do is write a letter to JLT and ask specifically why nothing is due. I'll pop back once I know and see what you guys and gals think. The only thing I find odd is if it's correct JLT did 'try' and get in touch why would that be if nothing was due?

Thanks people. Much like Arnie, I will be back.

xylophone

The only thing I find odd is if it's correct JLT did 'try' and get in touch why would that be if nothing was due?

Have you checked your late father's bank/building society statements to see if a pension was in payment?

Is it possible that a pension payment was returned by your late father's bank to JLT and that is the reason why they were trying to get in touch?

xylophone

There was a Johnsons Group Defined Benefit Pension Scheme that was closed to new entrants several years ago. It is probably this scheme that is administered by JLT?

Your father appears to have worked for the company for a long time and it is possible that he was a member of this scheme.

If he had left employment owing to ill health it is not impossible that he was in receipt of an ill health pension.

If this was the case and he had left a widow or dependent children, it is likely that some pension would have continued in payment after his death.

Your father was divorced and it appears that you (any siblings) were past he dependent age.

If this was the case, his pension would almost certainly have died with him.

lewis321

Hello xylophone. It's unlikely anything went to his back because it was closed some weeks after his passing. He didn't leave with either a widow or dependent children. I was 33 at the time.

Just as a matter of course I'll get back in touch with JTL and see if I can get a little more info out of them. My ma is getting annoyed because she thinks something must be owed and irritated because I've not followed it up. Get it sorted, draw a line and move on!!