Pension lump sum?

AttractingMoreMoney

Hello,

I've read quite a few posts on pensions, but I'd like to ask a question in regards to my own circumstances as this area seems uncertain.

My mum passed away unfortunately at only 60 years-old. She had three pensions. One she withdrew a year before she became terminally ill, one she withdrew on the basis of her terminal illness and has since been used to cover her funeral costs. The third (an assa abloy pension) I am currently awaiting the trustees decision on whether to pay out a lump sum. I am the executioner of her will also, though I know it may not mean anything to the trustees.

I am my mum's only child, not considered a dependent due to my age, but we lived in the same house, which is currently going through probate. My mum put me down on her Expression of Wish form back in the 90's, and then again about a month before she passed away late last year. However, she was made redundant from the company associated with this pension back in 2007. She worked for them for over 20 years so I see it as a "dormant" pension.

The trustees have asked if she had a spouse/partner... I have told them no and her status was single upon her passing. 

I consider it likely I will receive a lump sum, but I am anxious about it. There is some small outstanding debt and solicitors fees that will need to be paid, and I now will undertake all household bills. Anything from this pension scheme would take a weight off my shoulders.

Is there any chance the trustees could not pay out a lump sum? Or due to me being an only child and nominated on her EoW, is it quite certain I'll receive something?

MX5huggy

I’m no expert, but to meet the requirements of it being a trust the trustees always have reserve the right to issue the funds as they see fit.
You seem in a strong position, my and therefore their questions would be around where is your dad/her husband (ex or not)?

AttractingMoreMoney

MX5huggy said:

I’m no expert, but to meet the requirements of it being a trust the trustees always have reserve the right to issue the funds as they see fit.
You seem in a strong position, my and therefore their questions would be around where is your dad/her husband (ex or not)?

Hello, thank you for replying.

My dad and mum never married and haven't been in a relationship for 30+ years. My mum was in a relationship with someone else for a while, but they had no shared financial ties or assets.

Pat38493

Do you have access to the pension rules or factsheets?  This should indicate whether a lump sum and/or dependent pension is payable and who would be eligible for it.  Beyond that, it's at the discretion of the trustees but they would usually take into account what it written on the nomination form unless there is some strong reason to overrule it e.g. the person re-married and the nomination form was never updated.

AttractingMoreMoney

Pat38493 said:

Do you have access to the pension rules or factsheets?  This should indicate whether a lump sum and/or dependent pension is payable and who would be eligible for it.  Beyond that, it's at the discretion of the trustees but they would usually take into account what it written on the nomination form unless there is some strong reason to overrule it e.g. the person re-married and the nomination form was never updated.

Hello, thank you for replying. I don't have any paperwork on rules etc, but they did send a letter to say a lump sum might be payable. I've no idea how much it could be. I was/am worried about being an adult "child" and not classed as a dependant however. Hopefully, I'll know soon.

Pat38493

AttractingMoreMoney said:

Pat38493 said:

Do you have access to the pension rules or factsheets?  This should indicate whether a lump sum and/or dependent pension is payable and who would be eligible for it.  Beyond that, it's at the discretion of the trustees but they would usually take into account what it written on the nomination form unless there is some strong reason to overrule it e.g. the person re-married and the nomination form was never updated.

Hello, thank you for replying. I don't have any paperwork on rules etc, but they did send a letter to say a lump sum might be payable. I've no idea how much it could be. I was/am worried about being an adult "child" and not classed as a dependant however. Hopefully, I'll know soon.

Probably you need to wait for them to give you more information - you could also ask them for a copy of the pension fact sheet or relevant rules as it may be different for each pension.  In my DB pension it says that if there is no spouse, civil partner or dependent children, payment of any benefits after death is "at trustee discretion".  It is not specifically stated how the define dependent children but I think it usually means non adult children - beyond that it's for the trustees to decide and to be honest I don't have experience of how they normally deal with these situations.

dunstonh

Sorry for your loss.

I consider it likely I will receive a lump sum, but I am anxious about it. There is some small outstanding debt and solicitors fees that will need to be paid, and I now will undertake all household bills. Anything from this pension scheme would take a weight off my shoulders.

What type of pension is it?  If it is a defined benefit scheme then its probable that nothing will come from it given your age.   If its a defined contribution scheme then it would never be dormant (noting dormant only applies to bank accounts and not pensions). They would just be an an investment that goes up and down daily until it is drawn.  Usually these are paid out to the beneficiary on death and the trustees only have to decide if the beneficiaries are correct, in their interpretation.

Pension proceeds are paid outside of the estate and should not be used to clear debts on the estate.   If the estate is in deficit then so be it.   You are not required to pay those from money that is from outside of the estate.    Although sometimes it may become necessary - i.e. if you want the property and there is a mortgage on the house.

Is there any chance the trustees could not pay out a lump sum?

Yes, as per above.

hyubh

dunstonh said:

Sorry for your loss.

I consider it likely I will receive a lump sum, but I am anxious about it. There is some small outstanding debt and solicitors fees that will need to be paid, and I now will undertake all household bills. Anything from this pension scheme would take a weight off my shoulders.

What type of pension is it?  If it is a defined benefit scheme then its probable that nothing will come from it given your age.

You're right a dependant pension is very unlikely, however a death grant (i.e. the thing the expression of wish form the OP referred to relates to) won't be uncommon though. I'd find it very likely the only child would get that, given no surviving partner and the fact the member nominated her and renominated her. Even more so if there's no one else talking to the trustees claiming they have a better claim on it. 

xylophone

The third (an assa abloy pension) 

she was made redundant from the company associated with this pension back in 2007. She worked for them for over 20 years so I see it as a "dormant" pension.

Hello, thank you for replying. I don't have any paperwork on rules 

https://forums.moneysavingexpert.com/discussion/6397133/assa-abloy-pension-chubb-security-pension

Do you mean that your mother had a deferred DB pension (possibly from Chubb)?

AttractingMoreMoney

dunstonh said:

Sorry for your loss.

I consider it likely I will receive a lump sum, but I am anxious about it. There is some small outstanding debt and solicitors fees that will need to be paid, and I now will undertake all household bills. Anything from this pension scheme would take a weight off my shoulders.

What type of pension is it?  If it is a defined benefit scheme then its probable that nothing will come from it given your age.   If its a defined contribution scheme then it would never be dormant (noting dormant only applies to bank accounts and not pensions). They would just be an an investment that goes up and down daily until it is drawn.  Usually these are paid out to the beneficiary on death and the trustees only have to decide if the beneficiaries are correct, in their interpretation.

Pension proceeds are paid outside of the estate and should not be used to clear debts on the estate.   If the estate is in deficit then so be it.   You are not required to pay those from money that is from outside of the estate.    Although sometimes it may become necessary - i.e. if you want the property and there is a mortgage on the house.

Is there any chance the trustees could not pay out a lump sum?

Yes, as per above.

I managed to find some paperwork from the early 2000s and it mentions both based on whether contributions were made. As far as I can tell by the statement my mum was making contributions up until she was made redundant. I will just have to wait and see what the trustees decide. 

AttractingMoreMoney

xylophone said:

The third (an assa abloy pension) 

she was made redundant from the company associated with this pension back in 2007. She worked for them for over 20 years so I see it as a "dormant" pension.

Hello, thank you for replying. I don't have any paperwork on rules 

https://forums.moneysavingexpert.com/discussion/6397133/assa-abloy-pension-chubb-security-pension

Do you mean that your mother had a deferred DB pension (possibly from Chubb)?

Hi there, yes it was originally a Chubb Pension. When I contacted them about it they referred me to Assa Abloy/Mercer. It mentions lump sums and pots in the paperwork, but I'm not certain I'll qualify to receive it.