Advice - death 3 months after retiring but no payout

Brynsam

monkeysrule wrote: »

Hi, I do have his stuff and there is even a booklet with terms, I read about the death grant and that seemed like it should apply, but tbh I find pensions very confusing and difficult to understand exactly what is what. I wondered if there was service that could help me, pensions are the most confusing thing

There certainly is. Free, impartial and aimed at people just like you (utterly confused by this whole baffling area called pensions): https://www.pensionsadvisoryservice.org.uk

bostonerimus

I hope that the OP manages to track this stuff down!

When someone dies we are faced with many important and often difficult decisions, so it's important that people have a will, well organised estate and that they talk to their relatives about their wishes and finances well before they die. Money and death a couple of the few things people still don't like to talk about, but they need to be discussed. If you don't want to do this with your heirs then at least do it with an executor that could be your solicitor.

I have a pension with a death benefit and I have nominated my niece as the beneficiary and have given her the pension details so she can follow up.

Aretnap

monkeysrule wrote: »

I don't see the point of a pension why not just invest the money yourself at least it's yours

I'm sorry for your loss and your confusion.

The purpose of a pension - at least a defined benefit pension like the TPS - is to give yourself a secure income which ensures you have a comfortable retirement, rather than to leave a pot of money to your descendants. So your dad didn't have any pot of money of his own - he had a guarantee that he'd be paid a monthly income for the rest of his life, whether he lived to be 65 or whether he lived to 100. For most people this is an extremely valuable benefit as it gives them certainty and means that they never have to worry about running out of money in retirement, and most people do end up being paid significantly more than they ever paid in contributions. However it probably doesn't feel like this if your dad was one of the unlucky people who die soon after retirement. In essence the scheme pools the money, so the people who die young effectively subsidise the people who live to 100. Though both are also heavily subsidised by the employer (in this case ultimately the government) - hence the fact that the total paid out is far more than the total paid in by employees.


There are two common exceptions to the general principle that it's for you rather than your family. The first is where you have relatives who would be expected to be financially dependant on you (ie a spouse or children not of working age), in which case the scheme will usually continue paying some or all of your pension to them after your death. However this exception doesn't extend to paying money to grown-up children who are presumably making their own way in the world and financially independent. And the second is where you die very soon after retirement, in which case the scheme will often include a promise to continue paying your pension for a limited period (eg 5 years), or provide an equivalent death grant to your family. Each scheme has its own rules, but it sounds like your dad's included a death grant - good luck in tracking it down.

Shimrod

Aretnap wrote: »

And the second is where you die very soon after retirement, in which case the scheme will often include a promise to continue paying your pension for a limited period (eg 5 years), or provide an equivalent death grant to your family. Each scheme has its own rules, but it sounds like your dad's included a death grant - good luck in tracking it down.

I think this (from the link in a earlier post) is key.



"If you’re a pensioner and your pension has been in payment for less than 5 years, a discretionary death grant is payable that is equal to five times your annual pension less any pension received prior to your death."


As a trustee, there are two types of discretion. One is whether any payment is made at all, the other is not whether a payment will be made, but to whom it will be paid. In my pension scheme, the discretion in this instance would be around who received the payment, but TPS may be different and this is the rule that would need to be clarified with the pension administrators.

greenglide

He had worked all his life and had always paid into a private pension as he was self employed, but in his last years he was a lecturer at a college (hence he transferred it to the teachers pension).

It sounds to me as though he hadn't paid into the TPS for 45 years then.


If he moved his private pensions into the TPS then the amount of pension bought may not have been huge - it would depend on how move he had paid into the private scheme.



While I would expect a death grant of some amount (5 years of pension payments less the amount already paid out?) It may not be huge.


Are you the executor of the estate? It should have been paid out when the scheme was informed of his death.

Silvertabby

Based on what OP has said, I can't see any reason why there wouldn't have been a lump sum death grant payable. There's no way even the most junior TPS pensions administrator would have missed this, as his/her work would have eventually been checked by someone more senior.

My only reservation is that the death grant was, in fact, paid in accordance with the nominated beneficiary form - and that this nominated person was someone other than the OP (death grant beneficiary doesn't have to be nok or even a family member ). If I'm right, then TPS should at least be able to confirm that the death grant was paid in accordance with the nomination form - but they probably won't tell OP the name of the person, or even the amount paid, due to data protection legislation.

Alexland

Or perhaps whoever reported the death to TPS accidentally confirmed there were no remaining potential beneficiaries?

Silvertabby

Alexland wrote: »

Or perhaps whoever reported the death to TPS accidentally confirmed there were no remaining potential beneficiaries?

No - there's always a beneficiary for the lump sum death grant, even if it's just the Estate. And OP must have told TPS of his relationship, for TPS to have told him that there were no ongoing survivor's pension benefits.

bostonerimus

I suppose if a beneficiary wasn't nominated and their was no spouse then any death benefit would have gone into the estate and would have been distributed between the heirs and so could have been diluted and not really noticed. Maybe some questions to the executor would provide some answers.

Silvertabby

bostonerimus wrote: »

I suppose if a beneficiary wasn't nominated and their was no spouse then any death benefit would have gone into the estate and would have been distributed between the heirs and so could have been diluted and not really noticed. Maybe some questions to the executor would provide some answers.

Payment to the Estate is always the last resort. In the case of no nomination form, the spouse is the default recipient. In the case of no spouse but one or more children then it's still easy - the death grant goes to the children. It's only in the event of no immediate nok (or multiple/contentious claims for the death grant) that the money could be paid to the executor for distribution in accordance with the Will (or intestacy laws ).

monkeysrule - may I gently ask if you have any siblings who 'pipped you to the post' to claim full payment of the death grant? Or is it possible that your father had a companion (or a favourite charity), that he nominated as his beneficiary?