Pension pot inheritance

whyamiherenow

Hi all, looking for some help. Father in law died in 2008. He died before he was of pensionable age. Over a year ago so 2023 we were contacted by a pension provider to say they thought they had a pension pot belonging to him. We have jumped through many hoops. Endless document provision etc. They have now returned with a figure for the pension pot. Decent amount but relatively small ie less than £5k. They have asked us to fill out another form and re provide documents we already gave them. This is fine. 

However with the form they included a printed email from an actuary (not sure whether the email inclusion was an error) stating this sum they are offering was the value of the pension pot at date of death. 

I do understand it is unusual that we have come across the pension pot 16 years after death etc. but I can’t find any guidance anywhere to state whether any interest is due on the sum for the last 16 years / whether it would have remained invested and we should have some additional benefit?

Even 1% over this time would be an additional £500 ish. 

In essence I wondered if anybody had been in a similar situation or knew of any guidance about how to approach this? 

We aren’t ungrateful about the sum of money just wondering if it should have been subject to interest or other multiplier over 16 years. 

Marcon

whyamiherenow said:

Hi all, looking for some help. Father in law died in 2008. He died before he was of pensionable age. Over a year ago so 2023 we were contacted by a pension provider to say they thought they had a pension pot belonging to him. We have jumped through many hoops. Endless document provision etc. They have now returned with a figure for the pension pot. Decent amount but relatively small ie less than £5k. They have asked us to fill out another form and re provide documents we already gave them. This is fine. 

However with the form they included a printed email from an actuary (not sure whether the email inclusion was an error) stating this sum they are offering was the value of the pension pot at date of death. 

I do understand it is unusual that we have come across the pension pot 16 years after death etc. but I can’t find any guidance anywhere to state whether any interest is due on the sum for the last 16 years / whether it would have remained invested and we should have some additional benefit?

Even 1% over this time would be an additional £500 ish. 

In essence I wondered if anybody had been in a similar situation or knew of any guidance about how to approach this? 

We aren’t ungrateful about the sum of money just wondering if it should have been subject to interest or other multiplier over 16 years. 

Depends entirely on the terms of the contract. You're assuming that the pot value would have increased, but depending on the funds in which it was invested, it might just as well have decreased!

The other possibility is that this isn't actually a pot (ie a defined contribution scheme), but a refund of his personal contributions to some sort of defined benefit arrangement, in which case it would be quite normal to refund what he actually paid without any allowance for interest or growth. This would depend on the rules of the scheme. It's the more likely possibility given the involvement of an actuary.

For your own peace of mind, go back and ask the provider why you are being paid the value at date of death rather than a value which reflects the investment return to date. 

whyamiherenow

whyamiherenow said:

Hi all, looking for some help. Father in law died in 2008. He died before he was of pensionable age. Over a year ago so 2023 we were contacted by a pension provider to say they thought they had a pension pot belonging to him. We have jumped through many hoops. Endless document provision etc. They have now returned with a figure for the pension pot. Decent amount but relatively small ie less than £5k. They have asked us to fill out another form and re provide documents we already gave them. This is fine. 

However with the form they included a printed email from an actuary (not sure whether the email inclusion was an error) stating this sum they are offering was the value of the pension pot at date of death. 

I do understand it is unusual that we have come across the pension pot 16 years after death etc. but I can’t find any guidance anywhere to state whether any interest is due on the sum for the last 16 years / whether it would have remained invested and we should have some additional benefit?

Even 1% over this time would be an additional £500 ish. 

In essence I wondered if anybody had been in a similar situation or knew of any guidance about how to approach this? 

We aren’t ungrateful about the sum of money just wondering if it should have been subject to interest or other multiplier over 16 years. 

Depends entirely on the terms of the contract. You're assuming that the pot value would have increased, but depending on the funds in which it was invested, it might just as well have decreased!

The other possibility is that this isn't actually a pot (ie a defined contribution scheme), but a refund of his personal contributions to some sort of defined benefit arrangement, in which case it would be quite normal to refund what he actually paid without any allowance for interest or growth. This would depend on the rules of the scheme. It's the more likely possibility given the involvement of an actuary.

For your own peace of mind, go back and ask the provider why you are being paid the value at date of death rather than a value which reflects the investment return to date. 

Thanks for this. It has rumbled on for a long time. 

We have no idea what the money represents really because they contacted us (we thought we squared this all away a long time ago). 

I will go back and ask them the nature of the funds and potentially for the terms of the investment. 

The company has a 12 week turn around time for correspondence so we will see. 

I do think they included their internal email with the printed form in error because the offer letter makes no reference to how the calculation was reached or what it represents. 

Brie

Was he married at the time of his death and is his widow still alive?  I would ask if there should have been a widow's pension paid. 

Presumably in 2008 there were no children under 25 so unlikely there was any "orphan's" pensions payable.  

whyamiherenow

Brie said:

Was he married at the time of his death and is his widow still alive?  I would ask if there should have been a widow's pension paid. 

Presumably in 2008 there were no children under 25 so unlikely there was any "orphan's" pensions payable.  

In 2008 he was divorced a long time so no widows pension as far as we are aware. His son was 23 at the time of his death. He only has one child (who is my husband). What is an orphans pension? I haven’t heard of this. 

Albermarle

whyamiherenow said:

whyamiherenow said:

Hi all, looking for some help. Father in law died in 2008. He died before he was of pensionable age. Over a year ago so 2023 we were contacted by a pension provider to say they thought they had a pension pot belonging to him. We have jumped through many hoops. Endless document provision etc. They have now returned with a figure for the pension pot. Decent amount but relatively small ie less than £5k. They have asked us to fill out another form and re provide documents we already gave them. This is fine. 

However with the form they included a printed email from an actuary (not sure whether the email inclusion was an error) stating this sum they are offering was the value of the pension pot at date of death. 

I do understand it is unusual that we have come across the pension pot 16 years after death etc. but I can’t find any guidance anywhere to state whether any interest is due on the sum for the last 16 years / whether it would have remained invested and we should have some additional benefit?

Even 1% over this time would be an additional £500 ish. 

In essence I wondered if anybody had been in a similar situation or knew of any guidance about how to approach this? 

We aren’t ungrateful about the sum of money just wondering if it should have been subject to interest or other multiplier over 16 years. 

Depends entirely on the terms of the contract. You're assuming that the pot value would have increased, but depending on the funds in which it was invested, it might just as well have decreased!

The other possibility is that this isn't actually a pot (ie a defined contribution scheme), but a refund of his personal contributions to some sort of defined benefit arrangement, in which case it would be quite normal to refund what he actually paid without any allowance for interest or growth. This would depend on the rules of the scheme. It's the more likely possibility given the involvement of an actuary.

For your own peace of mind, go back and ask the provider why you are being paid the value at date of death rather than a value which reflects the investment return to date. 

Thanks for this. It has rumbled on for a long time. 

We have no idea what the money represents really because they contacted us (we thought we squared this all away a long time ago). 

I will go back and ask them the nature of the funds and potentially for the terms of the investment. 

The company has a 12 week turn around time for correspondence so we will see. 

I do think they included their internal email with the printed form in error because the offer letter makes no reference to how the calculation was reached or what it represents. 

Could be worth saying who the provider is. A 12 week turnaround for correspondence is very slow.

Marcon

whyamiherenow said:

Brie said:

Was he married at the time of his death and is his widow still alive?  I would ask if there should have been a widow's pension paid. 

Presumably in 2008 there were no children under 25 so unlikely there was any "orphan's" pensions payable.  

In 2008 he was divorced a long time so no widows pension as far as we are aware. His son was 23 at the time of his death. He only has one child (who is my husband). What is an orphans pension? I haven’t heard of this. 

If this was a defined benefit scheme, the rules of the scheme will set out who qualifies for a pension when the member dies. A spouse or civil partner's pension is (almost invariably) included, as is provision for a pension for an 'eligible child' (aka orphan's pension). An 'eligible child' will depend on the definition in the scheme's own rules and is usually payable to a natural/adopted/(sometimes)step child who is under 18; or possibly older - usually a maximum of 23 - if the 'child' is still in full time education or training and at the discretion of the scheme trustees should be paid such a pension.

Some rules also provide for a 'child's' pension to be continued with no upper age limit where the child was financially dependent on the member by way of disability or other ill health and would have continued to be so had the member lived.

The provisions are scheme-specific and do NOT apply in the same way to defined contribution schemes.