Selling DB partner benefit

michaels

Supppse you have a db pension with autimatic benefit for a surviving partner but no partner coild you not sell the partner benefit for a tidy sum to someone looking for an annuity. Obviously you would need a suitable prenup to protect other assets but basically it would allow the seller to realise sone of the value of an asset they would otherwise not be able to redeem? 

Pablo7474

No. I guess you could marry them? 

robatwork

A prenup pre-supposes a nup.

QrizB

Pablo7474 said:

No. I guess you could marry them? 

Marriage or civil partnership, as the case may be.

Silvertabby

Not legally.  As has been mentioned, you could get married or enter into a civil partnership (subject to scheme rules re post retirement marriages, if applicable) - but your financial 'partner' wouldn't be able to cash in until after your death.  With no guarantee that you would be the one to go first.  

And before someone mentions it, yes, many schemes now pay survivor's benefits to non-married cohabiting partners.  But these schemes will at least need to see some proof of interdependancy, such as a joint mortgage.

michaels

I'm thinking someone with a generous db without a partner close to death decides to enter into a civil partnership with someone much younger in return for a one of payment of say £100k which they could bequeath to their children which would in turn grant the purchaser/partner a 50% annuity for life that would otherwise expire on the pensioners death.

Alexland

Maybe you could ask one of your children to divorce their partner such that you can marry the partner...

zagfles

michaels said:

I'm thinking someone with a generous db without a partner close to death decides to enter into a civil partnership with someone much younger in return for a one of payment of say £100k which they could bequeath to their children which would in turn grant the purchaser/partner a 50% annuity for life that would otherwise expire on the pensioners death.

Fake marriages/CPs could be used for all sorts of scams. immigration, IHT dodges etc, which is why the authorities are wise to them. Just as fake separations could be used for other scams like benefit fraud, pensions LTA splitting etc.

Beside which, as well as being a indicator of a possible scam, most schemes will actuarily reduce the spouse benefit if the spouse is much younger.

Pablo7474

Yes, common for it to be reduced if spouse is more than 10 years younger, I think 2.5% per annum over 10 years is common. 

sevenhills

QrizB said:

Marriage or civil partnership, as the case may be.

Are there any poor people left that would be willing? Nothing wrong with marrying someone for security.

michaels

zagfles said:

michaels said:

I'm thinking someone with a generous db without a partner close to death decides to enter into a civil partnership with someone much younger in return for a one of payment of say £100k which they could bequeath to their children which would in turn grant the purchaser/partner a 50% annuity for life that would otherwise expire on the pensioners death.

Fake marriages/CPs could be used for all sorts of scams. immigration, IHT dodges etc, which is why the authorities are wise to them. Just as fake separations could be used for other scams like benefit fraud, pensions LTA splitting etc.

Beside which, as well as being a indicator of a possible scam, most schemes will actuarily reduce the spouse benefit if the spouse is much younger.

What makes it a scam though?  Are there wordings in the pension contract around what makes a civil partnership 'real' rather than for convenience and that rule out the latter for partner benefits?