Can Pension Company refuse to pay to nominee

Linton

Cobbler_tone said:

Albermarle said:

Cobbler_tone said:

This is an issue which troubles me a little whilst living with a partner.
I am divorced and have grown up children.
My beneficiary on both pensions is my partner and the rules of my DB are 'husband/wife/civil partner'.
It is the reason we will ultimately probably get married because otherwise it is at the discretion of the Trustees.
We are not even in a world where she could demonstrate that she is financially dependant on me.

Trustees of DC schemes should have no problem to pay out to a named beneficiary who is not a spouse/civil partner, assuming no other unusual circumstances/objections from ex wife/husband etc.

The issue with that is the word "should". I may be dead at the time (i.e. not my problem!) but I would like to think that there would be zero chance of it not being paid out to a named surviving partner on my DB scheme.
Making things 'official' take that chance out. I actually know one of the Trustee's quite well personally and they gave me a politicians answer when I spoke to them.
Even more important if it forms a part of their future financial security if I'm not about, i.e. they can meet the next man of their dreams and cruise around the world.   

DB schemes are different.  Unlike DC pensions, there is no fixed pot of money to be distributed. Who gets what (if anything) on the death of a member is determined by the scheme rules or their employment contract (eg death in service benefit).

Cobbler_tone

Linton said:

Cobbler_tone said:

Albermarle said:

Cobbler_tone said:

This is an issue which troubles me a little whilst living with a partner.
I am divorced and have grown up children.
My beneficiary on both pensions is my partner and the rules of my DB are 'husband/wife/civil partner'.
It is the reason we will ultimately probably get married because otherwise it is at the discretion of the Trustees.
We are not even in a world where she could demonstrate that she is financially dependant on me.

Trustees of DC schemes should have no problem to pay out to a named beneficiary who is not a spouse/civil partner, assuming no other unusual circumstances/objections from ex wife/husband etc.

The issue with that is the word "should". I may be dead at the time (i.e. not my problem!) but I would like to think that there would be zero chance of it not being paid out to a named surviving partner on my DB scheme.
Making things 'official' take that chance out. I actually know one of the Trustee's quite well personally and they gave me a politicians answer when I spoke to them.
Even more important if it forms a part of their future financial security if I'm not about, i.e. they can meet the next man of their dreams and cruise around the world.   

DB schemes are different.  Unlike DC pensions, there is no fixed pot of money to be distributed. Who gets what (if anything) on the death of a member is determined by the scheme rules or their employment contract (eg death in service benefit).

I know the difference.
There is a spousal provision. Hence the rules on mine saying 'spouse or civil partner' and the security of getting married in case the Trustee's chose not to pay out to your co-habiting survivor of many years.  There may not be a pot of money but there is £1b of assets and under £900m of liabilities in mine, so I'd like protection for both of us.
I'm more relaxed on the 'death in service' payment and confident that would go to her whilst employed.

Apologies to anyone if it blurred the lines as I recognise the terms 'DC' and 'DB' and maybe didn't pick up the thread as specifically 'DC' only.

GunJack

@Cobbler_tone if you do end up married/civil partner it may well be worth making clear on your updated expression of wish form or an accompanying letter explaining that it's the same person you've had listed for many years, you've just now made her "official" 🙂

May be important as some schemes have rules about paying out if the spouse is relatively recent, either pre or post retirement 

Cobbler_tone

GunJack said:

@Cobbler_tone if you do end up married/civil partner it may well be worth making clear on your updated expression of wish form or an accompanying letter explaining that it's the same person you've had listed for many years, you've just now made her "official" 🙂

May be important as some schemes have rules about paying out if the spouse is relatively recent, either pre or post retirement 

Thank you, a good tip, although we haven't discussed name changes so could well be that they don't see a difference.

SmokeysTravels

From my experience in the industry if someone died and the person who contacted us was the expression of wish, then all we needed was a claim form and a death certificate and we would pay out. This could be done in a matter of days. 

However, if there was no expression of wish we would usually wait for probate. I spoke to a woman (fairly recently whilst I was working with Pension Wise ) whose husband had died and he had forgotten to name her as the expression of wish and that pension company was waiting for probate. She had been waiting for over a year and still hadn’t got the money as his estate was complex and it was taking an age to get probate. It’s so important that people complete and keep up to date their expression of wish on DC pensions.

Pat38493

SmokeysTravels said:

From my experience in the industry if someone died and the person who contacted us was the expression of wish, then all we needed was a claim form and a death certificate and we would pay out. This could be done in a matter of days. 

However, if there was no expression of wish we would usually wait for probate. I spoke to a woman (fairly recently whilst I was working with Pension Wise ) whose husband had died and he had forgotten to name her as the expression of wish and that pension company was waiting for probate. She had been waiting for over a year and still hadn’t got the money as his estate was complex and it was taking an age to get probate. It’s so important that people complete and keep up to date their expression of wish on DC pensions.

So you would have paid out, and potentially found out later on that you paid out to the person’s ex and they forgot to change the form but had re-married later on?  The usual example given out for this is when someone got divorced, then they re-married later on but forgot to change the expression of wish to the new spouse.  I’m sure I’ve heard of examples where the trustees paid out to the new spouse.

GunJack

Cobbler_tone said:

GunJack said:

@Cobbler_tone if you do end up married/civil partner it may well be worth making clear on your updated expression of wish form or an accompanying letter explaining that it's the same person you've had listed for many years, you've just now made her "official" 🙂

May be important as some schemes have rules about paying out if the spouse is relatively recent, either pre or post retirement 

Thank you, a good tip, although we haven't discussed name changes so could well be that they don't see a difference.

That's as maybe, but you would still need them to know she's now a spouse/civil partner...and be prepared to send a copy of the marriage/cp certificate if they get narky

SmokeysTravels

Pat38493 said:

SmokeysTravels said:

From my experience in the industry if someone died and the person who contacted us was the expression of wish, then all we needed was a claim form and a death certificate and we would pay out. This could be done in a matter of days. 

However, if there was no expression of wish we would usually wait for probate. I spoke to a woman (fairly recently whilst I was working with Pension Wise ) whose husband had died and he had forgotten to name her as the expression of wish and that pension company was waiting for probate. She had been waiting for over a year and still hadn’t got the money as his estate was complex and it was taking an age to get probate. It’s so important that people complete and keep up to date their expression of wish on DC pensions.

So you would have paid out, and potentially found out later on that you paid out to the person’s ex and they forgot to change the form but had re-married later on?  The usual example given out for this is when someone got divorced, then they re-married later on but forgot to change the expression of wish to the new spouse.  I’m sure I’ve heard of examples where the trustees paid out to the new spouse.

In the scenario I outlined above then yes absolutely we would have paid out. In other more complicated cases we would need more information. So, for example, a family member informs us of the member’s death and lets us know the member had remarried and wouldn’t want the money going to the ex spouse but we had the ex spouse as the expression of wish. In this example we would probably need probate. 

Marcon

SmokeysTravels said:

From my experience in the industry if someone died and the person who contacted us was the expression of wish, then all we needed was a claim form and a death certificate and we would pay out. This could be done in a matter of days. 

However, if there was no expression of wish we would usually wait for probate. I spoke to a woman (fairly recently whilst I was working with Pension Wise ) whose husband had died and he had forgotten to name her as the expression of wish and that pension company was waiting for probate. She had been waiting for over a year and still hadn’t got the money as his estate was complex and it was taking an age to get probate. It’s so important that people complete and keep up to date their expression of wish on DC pensions.

Pretty risky. Even with an up to date EOW, an appropriate level of due diligence is required - which means doing at least some checking. Just rubber stamping something 'because they're on the EOW' is inviting a challenge...

SmokeysTravels said:

Pat38493 said:

SmokeysTravels said:

From my experience in the industry if someone died and the person who contacted us was the expression of wish, then all we needed was a claim form and a death certificate and we would pay out. This could be done in a matter of days. 

However, if there was no expression of wish we would usually wait for probate. I spoke to a woman (fairly recently whilst I was working with Pension Wise ) whose husband had died and he had forgotten to name her as the expression of wish and that pension company was waiting for probate. She had been waiting for over a year and still hadn’t got the money as his estate was complex and it was taking an age to get probate. It’s so important that people complete and keep up to date their expression of wish on DC pensions.

So you would have paid out, and potentially found out later on that you paid out to the person’s ex and they forgot to change the form but had re-married later on?  The usual example given out for this is when someone got divorced, then they re-married later on but forgot to change the expression of wish to the new spouse.  I’m sure I’ve heard of examples where the trustees paid out to the new spouse.

In the scenario I outlined above then yes absolutely we would have paid out. In other more complicated cases we would need more information. So, for example, a family member informs us of the member’s death and lets us know the member had remarried and wouldn’t want the money going to the ex spouse but we had the ex spouse as the expression of wish. In this example we would probably need probate. 

Probate might not get you much further. If there's a will you can (and should) ask for a copy. If there isn't, could be a long wait - and either way, you might find yourself exceeding the two year mark before payment can be allocated, sparking a tax charge.

Sounds like some basic training would be no bad thing.

SmokeysTravels

Marcon said:

SmokeysTravels said:

From my experience in the industry if someone died and the person who contacted us was the expression of wish, then all we needed was a claim form and a death certificate and we would pay out. This could be done in a matter of days. 

However, if there was no expression of wish we would usually wait for probate. I spoke to a woman (fairly recently whilst I was working with Pension Wise ) whose husband had died and he had forgotten to name her as the expression of wish and that pension company was waiting for probate. She had been waiting for over a year and still hadn’t got the money as his estate was complex and it was taking an age to get probate. It’s so important that people complete and keep up to date their expression of wish on DC pensions.

Pretty risky. Even with an up to date EOW, an appropriate level of due diligence is required - which means doing at least some checking. Just rubber stamping something 'because they're on the EOW' is inviting a challenge...

SmokeysTravels said:

Pat38493 said:

SmokeysTravels said:

From my experience in the industry if someone died and the person who contacted us was the expression of wish, then all we needed was a claim form and a death certificate and we would pay out. This could be done in a matter of days. 

However, if there was no expression of wish we would usually wait for probate. I spoke to a woman (fairly recently whilst I was working with Pension Wise ) whose husband had died and he had forgotten to name her as the expression of wish and that pension company was waiting for probate. She had been waiting for over a year and still hadn’t got the money as his estate was complex and it was taking an age to get probate. It’s so important that people complete and keep up to date their expression of wish on DC pensions.

So you would have paid out, and potentially found out later on that you paid out to the person’s ex and they forgot to change the form but had re-married later on?  The usual example given out for this is when someone got divorced, then they re-married later on but forgot to change the expression of wish to the new spouse.  I’m sure I’ve heard of examples where the trustees paid out to the new spouse.

In the scenario I outlined above then yes absolutely we would have paid out. In other more complicated cases we would need more information. So, for example, a family member informs us of the member’s death and lets us know the member had remarried and wouldn’t want the money going to the ex spouse but we had the ex spouse as the expression of wish. In this example we would probably need probate. 

Probate might not get you much further. If there's a will you can (and should) ask for a copy. If there isn't, could be a long wait - and either way, you might find yourself exceeding the two year mark before payment can be allocated, sparking a tax charge.

Sounds like some basic training would be no bad thing.

There was always a balance to be struck between due diligence and providing excellent customer service. Here a risk based method was used. The size of some of these DC pots were very small (nothing like the numbers from some forum members). In the scenario I outlined above then assuming it was under a set level we would pay out. I don’t recall ever having a dispute over such a payment. 

Wills can only get you so far. Often there will be no mention of the pension. If someone was intent on committing fraud how would you know it was the most recent one?

It’s been several years since I worked for a pension provider, and the last one sold their book so it wouldn’t apply to them anymore anyway. However, from my own experience and from speaking to ex colleagues in the industry in terms of customer service the race to the bottom is really on. Prior to Covid many companies would try to turn work around in under five days. When Covid hit this all went out of the window. Some companies didn’t even answer phones. Whilst things got slightly better afterwards, there seems to be an acceptance that much higher turnaround times are acceptable and if you can put extra barriers in place then so be it. Going the extra mile and trying to improve the customer experience seems to be a thing of the past. It would seem the DC providers have finally figured out they can be as useless as DB ones and get away with it. If you have had to deal with any of those companies you will probably know what I mean.