Death in service

Carl2510

Hi,

does this part of the forum know about Death in service? I’ve just had a relative die recently and I’ve been told they had death in service at there job. I have emailed someone from his HR but he’s not very cooperative. Probably wouldn’t even have told me if I didn’t find out. Just any info on it would be grateful.

maisie_cat

The death in service payment is often a pension fund thing, when my dad died it was his pension scheme that paid the 3X salary. the family member ought to have nominated a person to receive their DIS benefit.

Carl2510

maisie_cat said:

The death in service payment is often a pension fund thing, when my dad died it was his pension scheme that paid the 3X salary. the family member ought to have nominated a person to receive their DIS benefit.

Hi thanks for the reply, the nominated person in his work file is my mum. Just wanted to know if we are going to need anything or do anything for this work to get any sort of pay out.

Carl2510

How do they calculate there wage? As he was off Work I’m sick pay before he died.

xylophone

Did your father have a pension scheme booklet?  This would  would explain death in service and widow's pension.
Example
https://www.lgpsmember.org/arm/already-member-prot.php

Paul_Herring

The death in service payment is often a pension fund thing, 

Company's choice. From  here.

Death in service cover is a benefit offered by some employers which will pay out a lump sum to a person of your choosing if you’re working for the company at the time of your death. The money from death in service is tax-free, and it’s usually a multiple of your yearly salary.
Death in service cover doesn’t require you to die while at work or in a work-related accident – you just need to be on the payroll.
[...]
Companies aren’t legally required to offer death in service benefit, so not all employers will give you cover. Sometimes death in service is linked to the company pension, which means you can be an employee without receiving death in service cover if you’re not signed on to the scheme.

Mine is 3×(pre-salary-sacrifice) gross wage.

Anyway, for the benefit of  the OP, the bumpf that comes along with my particular one follows. Note that this is particular to my company - others may (probably will) differ. But should give you some idea of what you're dealing with, and the sort of probing questions to ask the reticent HR bod.

Benefit

Group Life Assurance provides a lump sum payment on your death whilst in employment with {company}. The benefit is set up under Trust and payment will normally be made to your dependants, next of kin or legal personal representatives, as determined by the Trustees. You can make the Trustees aware of whom you wish to receive this benefit by completing a Beneficiary Nomination Form. Whilst your wishes are not legally binding, the Trustees will take them into account.

The lump sum benefit is provided by an insurance policy taken out by the Trustees and subject to terms and conditions which currently limit the maximum benefit without medical evidence to £1.385 million.

Supplier

The benefit is insured with {insurance company}.

Cover Summary

All employees are contractually entitled to a core level of life assurance cover, as shown on the Flexible benefits page.

You may be required to provide satisfactory medical evidence in respect of your full benefit entitlement; either upon joining {company} if your entitlement exceeds £1.385 million or if on receipt of a salary increase your revised entitlement exceeds £1.385 million. We will notify you if this is necessary.

Your cover will cease on the day you cease to be employed by {company} or, if you remain employed by {company}, when you attain your age for obtaining a State Pension.

What does it cost?

Your core life assurance entitlement is a benefit provided by {company} at no cost to you.

How to Claim

In the event of a claim it will be initiated and handled by HR.

However, on joining {company} you should have completed an up to date Beneficiary Nomination Form, to indicate to whom you would prefer this benefit to be payable to in the event of your death and returned the original form to HR.

Reminder

Please ensure that your Beneficiary Nomination Form is up to date. If you wish to change your form or complete one for the first time, a copy of the form is available in the Document Library on your Orbit account.

HM Revenue & Customs Treatment

Under current legislation, the cost of providing this benefit is not treated as a benefit in kind and so not subject to income tax or employee National Insurance. However, any benefit payable will count towards the Lifetime Allowance, which is set at £1.055 million for the 2019 / 2020 tax year.

If the total lump sum payable on death, plus any other death payments relating to pension arrangements (for example, a return of the value of your pension fund or any death benefits payable under previous arrangements) exceeds the Lifetime Allowance in force at your death, your beneficiary or beneficiaries could be liable to pay their share of a 55% tax charge on some or all of the money they receive.

Governing Documentation

Every effort has been made to ensure that the information shown here is up-to-date and accurate. However, in the event of a dispute, the governing documentation will be the insurer's Terms and Policy Conditions and any restrictions imposed by HM Revenue and Customs in force at that time.

Carl2510

Thanks for that, I shall keep onto HR and see what they say.

Brynsam

Carl2510 said:

Thanks for that, I shall keep onto HR and see what they say.

HR are not being uncooperative (funny how people always accuse them of that when they don't immediately get what they want); they are quite rightly declining to discuss something for the simple reason the decision is not theirs.  You don't need to 'keep on' to them and they won't thank you for it. Nor will it make things move any quicker, especially as they are probably all working from home and may not have access to HR files if theses are not fully digitised.

If the company had a death in service scheme which is administered by trustees (highly likely), the trustees can't just rely on the Expression of Wish (aka Nomination) Form even if your relative updated his form quite recently. Trustees are required to make 'reasonable enquiries' before making a decision about who gets any lump sum (e.g. asking if the deceased left a will), so you are likely to be looking at a delay of several months or more, especially if no trustee meeting is in the offing.

If the company needs anything from your mum, they will ask. It will be factual such as birth/marriage certificates rather than 'catch you out' questions. 

Marcon

Carl2510 said:

Hi,

does this part of the forum know about Death in service? I’ve just had a relative die recently and I’ve been told they had death in service at there job. I have emailed someone from his HR but he’s not very cooperative. Probably wouldn’t even have told me if I didn’t find out. Just any info on it would be grateful.

Told by whom? And how do you know his most recent nomination form names your mother? As Brynsam has pointed out, simply completing a form won't be enough to give the trustees the information they need to make an informed decision, so give HR a break. They probably can't tell you anything at this stage if your relative's death was recent - and they certainly won't want to get involved in a conversation about who might be awarded any lump sum payment. That's purely a trustee decision.

saver_ali

You don’t mention what relationship you have with the deceased, but it may be that HR aren’t prepared to deal with anyone other than an immediate member of the family, or an executor. We also don’t know how recent the death was. Presumably the employer is aware of it, and should be taking the necessary steps anyway. 

I seem to remember, when I set up a similar scheme, that we were required by the insurer to have a written policy/procedure document as to how we we would deal with it. (I don’t have access to it as I’ve retired now.)

AnotherJoe

Carl2510 said:

Thanks for that, I shall keep onto HR and see what they say.

You need to get your mum onto it, or if she's not up to that, get the company to agree to speak to you as a representative of your mum, for which she may need to sign a letter or some such.

They shouldnt be speaking to you at all without her permission.