Death before taking pension

CEON44

My wife has a pretty good pension pot. She no longer works but isnt in dire need to take the money now, but plans to take in about 18 months time when she reaches 60 years old. The question I have is, if she were to pass away before she takes the pension, in whatever form, would it all be lost or would I as husband but entitled to a portion. By the way, not trying to bump her off or anything;)

LHW99

Depends what type of pension. Defined benefit (final salary) pensions usually give a reduced (maybe 50%) spouse pension. Defined contribution ones have a "pot" that can be inherited - so ideally she gives whoever runs the pension an expression of wishes form.

atush

What type of pension does she have?

If a DB/final salary type, there may be a guarantee period of say 5 years and you would get that mone plus any spousal pension- as above quite often around 50%.

With a DC pension 'pot' you would inherit it tax free (although best if she has filled out her expression of wishes in both cases).

ColdIron

CEON44 wrote: »

By the way, not trying to bump her off or anything;)

I've had some success with the Candlestick in the Billiard Room ;)

CEON44

I believe the pension is a DB. The reason I asked the question is because my wifes sister, who worked for the same firm moved her company pension to a private scheme. Her main reason for doing this was she was told by FA that if she died the money was lost in the company scheme whereas in the private scheme it would be part of her estate if she passed away. Maybe because my wifes sister is still under 50? Would this ne the reason she would lose it? My wife is 58 1/2 Does that make a difference

Silvertabby

CEON44 wrote: »

I believe the pension is a DB. The reason I asked the question is because my wifes sister, who worked for the same firm moved her company pension to a private scheme. Her main reason for doing this was she was told by FA that if she died the money was lost in the company scheme whereas in the private scheme it would be part of her estate if she passed away. Maybe because my wifes sister is still under 50? Would this ne the reason she would lose it? My wife is 58 1/2 Does that make a difference

It all depends on the actual scheme rules. Can you access the scheme information booklet? That should tell you what happens to pension benefits in the event of the death of the member. Otherwise, post the name of the scheme and we'll have a look for you.

Was your wife's sister married when this advice was given?

coyrls

CEON44 wrote: »

I believe the pension is a DB. The reason I asked the question is because my wifes sister, who worked for the same firm moved her company pension to a private scheme. Her main reason for doing this was she was told by FA that if she died the money was lost in the company scheme whereas in the private scheme it would be part of her estate if she passed away. Maybe because my wifes sister is still under 50? Would this ne the reason she would lose it? My wife is 58 1/2 Does that make a difference

A private scheme would not form part of her estate if she passed away, which can be a benefit as it is not subject to inheritance tax. Most DB schemes have provision for a spouse in the event of the death of a member.

Marcon

CEON44 wrote: »

I believe the pension is a DB. The reason I asked the question is because my wifes sister, who worked for the same firm moved her company pension to a private scheme. Her main reason for doing this was she was told by FA that if she died the money was lost in the company scheme whereas in the private scheme it would be part of her estate if she passed away. Maybe because my wifes sister is still under 50? Would this ne the reason she would lose it? My wife is 58 1/2 Does that make a difference

Was your wife's sister unmarried at the time the advice was given?

RADDERS

I took the transfer value of my DB scheme, one of the main reasons was that if anything had happened to me before the pension had started paying then hubby would not have got a pension just a refund of contributions.

But if anything had happened after the pension was in payment then he would have received a 50% pension, as I was 9 years off starting the pension I transferred to a SIPP with Prudential on the advice of my IFA

CEON44

Silvertabby wrote: »

It all depends on the actual scheme rules. Can you access the scheme information booklet? That should tell you what happens to pension benefits in the event of the death of the member. Otherwise, post the name of the scheme and we'll have a look for you.

Was your wife's sister married when this advice was given?

My wife used to work for an offshoot of Courtaulds. The pension changed hands/names a few times but is now called DE UK Pension plan. I had a search for information booklet but couldnt find anything. As I said the reason Im a bit worried about it is because my wifes sister was advised to move hers to a private scheme and one of her main reasons for doing so was because if she died her husband would lose everything. Should my wife move the pension now or leave it until she is 60 in 18 months time, which was the original idea. The plan is worth about 200k

Silvertabby

CEON44 wrote: »

My wife used to work for an offshoot of Courtaulds. The pension changed hands/names a few times but is now called DE UK Pension plan. I had a search for information booklet but couldnt find anything. As I said the reason Im a bit worried about it is because my wifes sister was advised to move hers to a private scheme and one of her main reasons for doing so was because if she died her husband would lose everything. Should my wife move the pension now or leave it until she is 60 in 18 months time, which was the original idea. The plan is worth about 200k

Is it these people?

D.E PENSION TRUSTEE UK LIMITED
HORIZON HONEY LANE
HURLEY
MAIDENHEAD
BERKSHIRE
SL6 6RJ

If so, then it looks like they have taken over as trustees of the scheme, rather than administrators. That can complicate things somewhat. I would write to them to ask for details of what would happen to your wife's funds should she die before/after retirement - but you may get a wishy washy reply back along the lines of 'will be considered by the trustees at the time' (which means it depends on how much money they have to play with).

You could also ask for a transfer valuation at the same time.....