pension beneficiary

rickyroma

I have a few little pension pots but have not sorted out who the beneficiary would be if I die.  I have left everything to my partner in my will so will any pension pots automatically go to her or do I have to specifically make her the beneficiary of each pension ?

Savvy_Sue

It would be best to make her the beneficiary specifically, especially if you are not married, and especially if you have ever been married to someone else, and especially if you have children. 

This is because the trustees of each pension fund have discretion about who to pay out to: this discretion enables the pension pot to pass 'outside' the estate, and payment can usually be made quickly as a result. However, if there's any question over who could be entitled to the payment, they might decide to pay out to a former wife, or to children. If there's no formal legal standing to your relationship, they almost certainly have to consider whether anyone else might be entitled to the pension, which would almost certainly delay things. 

Nominating her should speed the process up considerably! 

rickyroma

Savvy_Sue said:

It would be best to make her the beneficiary specifically, especially if you are not married, and especially if you have ever been married to someone else, and especially if you have children. 

This is because the trustees of each pension fund have discretion about who to pay out to: this discretion enables the pension pot to pass 'outside' the estate, and payment can usually be made quickly as a result. However, if there's any question over who could be entitled to the payment, they might decide to pay out to a former wife, or to children. If there's no formal legal standing to your relationship, they almost certainly have to consider whether anyone else might be entitled to the pension, which would almost certainly delay things. 

Nominating her should speed the process up considerably! 

Thank you. I have never been married although I have a son. It sounds like my partner would have a good claim on my pension pots due to my will but I will make sure by making her a beneficiary 

Keep_pedalling

rickyroma said:

Savvy_Sue said:

It would be best to make her the beneficiary specifically, especially if you are not married, and especially if you have ever been married to someone else, and especially if you have children. 

This is because the trustees of each pension fund have discretion about who to pay out to: this discretion enables the pension pot to pass 'outside' the estate, and payment can usually be made quickly as a result. However, if there's any question over who could be entitled to the payment, they might decide to pay out to a former wife, or to children. If there's no formal legal standing to your relationship, they almost certainly have to consider whether anyone else might be entitled to the pension, which would almost certainly delay things. 

Nominating her should speed the process up considerably! 

Thank you. I have never been married although I have a son. It sounds like my partner would have a good claim on my pension pots due to my will but I will make sure by making her a beneficiary 

When you say I have a son, does that mean he is not your partner’s son? is you or your partner’s estate anywhere near the IHT threshold?

BooJewels

Just to expand on what @Savvy_Sue said - from the opposite perspective.  I made a claim on my late husband's pensions and whilst he had named me as the intended beneficiary (called a statement of wishes, I think) and rung them towards the end to ensure it was in place and to ask them to expedite matters quickly for me, I still needed to fill in a form, listing all family members and their dates of birth and whether they were financially dependent on my husband.  

So, if there was a son of a suitably young age, who might be considered financially dependent, he might take preference over your partner, unless you'd already made it clear where you wanted the funds to go.  So I would suggest that it would be well worth the time filling the forms in.

SevenOfNine

Even with a named beneficiary, the trustees of the deceased's pension & death in service payment checked with us, as exucutors, that there was nothing that needed to be reconsidered before paying out.

They said it was because circumstances may have changed since the form had been signed 3 years previously. 

p00hsticks

SevenOfNine said:

Even with a named beneficiary, the trustees of the deceased's pension & death in service payment checked with us, as exucutors, that there was nothing that needed to be reconsidered before paying out.

They said it was because circumstances may have changed since the form had been signed 3 years previously. 

Yes - ours wanted us to complete a form listing all the potential beneficiaries (spouse, ex-spouse, children, parents, siblings) and provide copies of paperwork such as birth certificates, decreees nisi and a copy of the will to help them come to a decision. (While having a named beneficiary is most important, at the end of the day it is the trustees decision, and this is an important principle in keeping the pension funds outside the deceaseds estate)

sheramber

It was the same for me.

I was named beneficiary, I inherited everything under the will, and my sons insisted to the pension company that the money was due to me, but the pension company told us they had to establish who  was entitled to the money.

Marcon

p00hsticks said:

SevenOfNine said:

Even with a named beneficiary, the trustees of the deceased's pension & death in service payment checked with us, as exucutors, that there was nothing that needed to be reconsidered before paying out.

They said it was because circumstances may have changed since the form had been signed 3 years previously. 

Yes - ours wanted us to complete a form listing all the potential beneficiaries (spouse, ex-spouse, children, parents, siblings) and provide copies of paperwork such as birth certificates, decreees nisi and a copy of the will to help them come to a decision. (While having a named beneficiary is most important, at the end of the day it is the trustees decision, and this is an important principle in keeping the pension funds outside the deceaseds estate)

You don't need to keep pension funds outside the deceased's estate, although you'll hear plenty of people, including some lawyers, who tell you that you do! The crucial thing is that they are paid out at the discretion of the trustees (or managers, where a scheme is unfunded but there is still a payment on death), in which case they are not subject to IHT even if the decision is to pay to the deceased's personal representatives (i.e. the estate).

rickyroma

sheramber said:

It was the same for me.

I was named beneficiary, I inherited everything under the will, and my sons insisted to the pension company that the money was due to me, but the pension company told us they had to establish who  was entitled to the money.

Sorry to be nosey (!), but did you get the money eventually? 

BooJewels

I can't answer for @sheramber - but I got my pension payout, the additional checks only added two or three weeks to the process.  

I think it's part of the process that's peculiar to pension payouts and that they're decided upon by trustees - a process that puts them outside of the estate.  They need to be seen to gather information and make an informed decision and for it therefore to be 'at their discretion'.  The two smaller pensions I got paid out didn't go through that process.