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Advice Please

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Wondering if anyone can help with this problem please.  I married my ex husband in 1986.  He had an Associated British Foods pension, he added me as a beneficiary if he died, and I am pretty sure he allocated half to me and half to any children we subsequently had.
We separated in 2004 and then divorced around 2009/10.  I re-married in 2011 and then found out at some point between us separating and me re-marrying, he had me removed from his pension.  
In 2019 he sadly passed away, and when our eldest daughter contacted the pensions people about the payout, she was told that as I had been removed from the pension as beneficiary, they were now not eligible for any payout.
I have since been told (no idea if info is correct) that for him to be able to remove me as beneficiary, I should have been asked to sign something agreeing to this happening.
I have also been told, (again, unsure if true) that when we divorced, a form  called a "Financial Clean Break" should have been filled in and signed by both of us.  I did a diy divorce and as far as I can remember, this form was not filled in and signed by either, but I will try to contact the courts during the week to see if they can check if this form was provided and signed.
As far as I know, we are talking about an amount around £27,000.00. I really am not bothered about the money for me, it is for our 4 children, and if they did not receive it, who did. What happened to the money ?
Also, the ironic side of this is, they overpaid him by 1 month after he died and they are now hounding our eldest daughter for the overpayment!!

PLEASE, if anyone can help with any info I would be really grateful.
Thank you in advance.

Dee



Highest Debt August 2004 - £32,000.00
Currently standing at 2008 - £7,000.00
Debt Free D-Day - November 2009

Debt cleared November 2009

Replies

  • chiefiechiefie Forumite
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    If your eldest daughter is acting as executor she will have to arrange paying back the overpaid pension (and state pension possibly too) as it’s overpaid. It may feel like it’s a little heartless but that’s the rule. 

    If his pension was a final salary/defined benefit and he didn’t have a partner/was married then the pension dies with him (Normally). If not the executor should contact the pension firm to establish the facts. 

    Good luck
  • AlbermarleAlbermarle Forumite
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    First you need to clarify what type of pension it was . 
    A DB (Defined Benefit) final salary scheme or a DC (defined contribution)/ money purchase scheme.
    The definitions are here
    https://www.moneysavingexpert.com/savings/discount-pensions/#need-9
  • edited 11 July at 11:30PM
    BrynsamBrynsam Forumite
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    edited 11 July at 11:30PM
    Dee64 said:
    Wondering if anyone can help with this problem please.  I married my ex husband in 1986.  He had an Associated British Foods pension, he added me as a beneficiary if he died, and I am pretty sure he allocated half to me and half to any children we subsequently had.
    We separated in 2004 and then divorced around 2009/10.  I re-married in 2011 and then found out at some point between us separating and me re-marrying, he had me removed from his pension.  
    In 2019 he sadly passed away, and when our eldest daughter contacted the pensions people about the payout, she was told that as I had been removed from the pension as beneficiary, they were now not eligible for any payout.
    I have since been told (no idea if info is correct) that for him to be able to remove me as beneficiary, I should have been asked to sign something agreeing to this happening.
    I have also been told, (again, unsure if true) that when we divorced, a form  called a "Financial Clean Break" should have been filled in and signed by both of us.  I did a diy divorce and as far as I can remember, this form was not filled in and signed by either, but I will try to contact the courts during the week to see if they can check if this form was provided and signed.

    Looking at the dates, I think when you check you are likely to find that he was in a final salary/defined benefit scheme, which automatically provided a spouse's pension, plus a pension for 'eligible children' (the usual definition of 'eligible' relates to age - typically 18, or up to 23 if in full time education/training) so there would have been no need for him to add you to the pension as a beneficiary. It is more likely that you/the children were named as potential beneficiaries for any lump sum death in service benefit (normally a multiple of current salary); or for any lump sum due if he died within 5 years of his pension actually starting to be paid (the balance of five years' pension payments). This would have been done by means of an 'Expression of Wish' (aka Nomination Form), although this form only guides the pension scheme trustees; it doesn't mean they must pay to the people named on the form.

    You say twice that you 'were told', but I wonder by whom? If my above surmises are correct, you certainly wouldn't have needed to agree to him changing his Expression of Wish form. If you did a DIY divorce you may well have simply failed to take his pension into account - too late now, I'm afraid.

    Your daughter is not being 'hounded' for payment. She is, quite correctly, being asked to return money which does not belong to the estate.

    You ask what happened to the money you believe is payable to you/the children. If this is indeed a final salary scheme, it will have remained in the scheme. That's how such schemes 'work'.
  • DairyQueenDairyQueen Forumite
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    Just for clarity OP...

    As has been mentioned, this sounds like a DB (defined benefit) - sometimes known as  'final salary' or 'career average' - scheme. Unlike DC (defined contribution) schemes, individuals do not build-up a personal pot of money in a DB scheme. Instead, these schemes provide an annual pension (for life) based on the member's salary and years of service. Any dependents receive a reduced sum (often 50%) on the death of the member. Not all members have dependents. Not all members live to receive their pension. The members who die prematurely subsidise the cost of the scheme's nonagenarians and centenarians. The members without dependents likewise subsidise the cost of those with widow/ers who live decades after a member's death.

    The scheme will define the meaning of 'dependent'. The clue is in the name. Usually the definition is restricted to current spouse and minor children (the people financially impacted by the member's death). A dependent child may receive benefits up to early 20s. A 'spouse' may include a current partner.

    Death benefits (life insurance lump sum) are also offered by DB schemes but they may be restricted to members who die whilst in service. Some schemes guarantee to pay a sum if the member dies within 5 years of retiring.

    The pension trustees determine who (if anyone) should receive a dependent's pension on the death of a scheme member. They are guided by the scheme rules. Your circumstances suggest that you and your children are not eligible. You are no longer the member's spouse and (presumably) all of your children are adults.

    Pension overpayments must be repaid unless the estate is insolvent. This is standard practice. It is a debt owed by the estate. Your daughter (as executor) should arrange this from estate assets. 

    On face value it appears that the administrator and trustees have applied the rules correctly and that the family has misunderstood the nature and benefits of your ex's pension scheme. 
  • DairyQueenDairyQueen Forumite
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    Another thought...

    If this was a DC scheme and your ex was receiving a pension from the proceeds at the time of his death, then he may have opted to purchase an annuity. This works similarly to a DB scheme inasmuch as an annual, lifetime pension is purchased from the pot. Once purchased it cannot be reversed. An annuity may be purchased, at extra cost, on a 'joint life' basis to provide a spousal pension on the pension-holder's death. Unlikely that you would have been the beneficiary of a joint lives arrangement if you were divorced at the time of purchase.

  • AnotherJoeAnotherJoe Forumite
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    Dee64 said:

    I have since been told (no idea if info is correct) that for him to be able to remove me as beneficiary, I should have been asked to sign something agreeing to this happening.


    I'm as close to certain as I can be, that thats totally incorrect. Certainly in all the pension schemes I've been in and am in, its up to me who I say i wish to get the money and they have no veto on any subsequent changes.
    Also, as said, most children dont benefit from such a pension (a DB one) after age low 20's, typically once out of full time education .
    The money has been retained in the scheme, as said above, to benefit other members who live longer than the average. 
  • Dee64Dee64 Forumite
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    Thank you all for that info, if no one is entitled to anything that is fine, I just needed clarity on it as, like I stated, I had been told several different things by people.  As for my daughter paying back the overpayment, she does not have the money, as she has 5 children and currently not working due to looking after them, and her father (my ex) died penniless and although she dealt with everything on his death, there was no will or anything and it was only because she was the oldest and everything fell on her. Appreciate the info.
    Dee64
    Highest Debt August 2004 - £32,000.00
    Currently standing at 2008 - £7,000.00
    Debt Free D-Day - November 2009

    Debt cleared November 2009
  • coyrlscoyrls Forumite
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    I don't believe that your daughter is personally liable for the repayment, it is the estate (for which she is an executor) that is liable, if there is literally no money in the estate, the debt cannot be repaid.
  • RetireintenRetireinten Forumite
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    Yes, please make sure your daughter understands that this is a debt that is payable by her father's estate, if there is no money left (assuming nothing has been distributed to members of the family already) then it can't be paid. They will no doubt need evidence that this so the case, but your daughter is definitely not liable to repay her father's overpaid pension. 
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