Unclaimed Private Pension

Dallascowbo

Good Afternoon All
I have been contacted by a pension fund that my late father was a member of but did not receive any payments from. Following a tracing exercise they conducted, they wanted to know if either his wife or children were eligible to receive a pension from the fund. They were not, although apparently a small lump sum is payable.

My question is whether his estate can claim the payments he was entitled to but did not claim? I'm assuming he had forgotten about the pension and was not contacted by the fund upon his reaching retirement age.

Thanks

Marcon

Dallascowbo said:

Good Afternoon All
I have been contacted by a pension fund that my late father was a member of but did not receive any payments from. Following a tracing exercise they conducted, they wanted to know if either his wife or children were eligible to receive a pension from the fund. They were not, although apparently a small lump sum is payable.

My question is whether his estate can claim the payments he was entitled to but did not claim? I'm assuming he had forgotten about the pension and was not contacted by the fund upon his reaching retirement age.

Thanks

If he was entitled to pension payments at the time of his death, then those would potentially be subject to IHT because they would be payable to the estate 'as of right' - but you need to check if he had already become entitled to them before he died.

The personal representatives can certainly ask for the small lump sum to be paid to them in their capacity of executors/administrators (as the case may be). It won't be taxable because the payment is being made at the discretion of the scheme's trustees. Put that to the scheme and if they say no, ask if it can be paid to whichever beneficiaries would have received it under the terms of your father's will/the rules of intestacy (again, as the case may be).

xylophone

Do you mean that your late father was a deferred member of a Defined Benefit Pension Scheme  at the time of his

death?  He had not reached normal scheme pension age at that point?

Was he married at the time of his death/divorced with  dependent children still in education?

Albermarle

As above some more detail about the pension scheme involved would be useful.

DullGreyGuy

Dallascowbo said:

I have been contacted by a pension fund that my late father was a member of but did not receive any payments from. Following a tracing exercise they conducted, they wanted to know if either his wife or children were eligible to receive a pension from the fund. They were not, although apparently a small lump sum is payable.

My question is whether his estate can claim the payments he was entitled to but did not claim? I'm assuming he had forgotten about the pension and was not contacted by the fund upon his reaching retirement age.

Sounds like it was a DB scheme, in which case potentially yes and more so if there was a guarantee period. 

DC scheme would have had the return of funds but then if you retire and there is £50k in your pot then you've £50k to last you the rest of your life


EDITED - misread the question initially, though it talked about reclaiming the original contributions. 

Marcon

DullGreyGuy said:

Dallascowbo said:

I have been contacted by a pension fund that my late father was a member of but did not receive any payments from. Following a tracing exercise they conducted, they wanted to know if either his wife or children were eligible to receive a pension from the fund. They were not, although apparently a small lump sum is payable.

My question is whether his estate can claim the payments he was entitled to but did not claim? I'm assuming he had forgotten about the pension and was not contacted by the fund upon his reaching retirement age.

Sounds like it was a DB scheme, in which case no. 

Depends if he was entitled to the payments in his own right by the time of his death. If an entitlement had arisen, then yes - see my post above.

OP needs to check the details with the scheme, but I suspect this is a DB scheme, the father had passed the scheme's normal retirement date (NRD) and then died within 5 years of that date - meaning there might be some instalments of pension due from NRD to date of death, plus a small 'guarantee' lump sum covering the remainder of 5 years of pension payments. Depends how the rules of the scheme dictate his situation is treated.

Tommyjw

Probably just a case of a refund of contributions payable for death in deferment (before taking his pension)

Dallascowbo

Thanks for the comments, I'll provide some further info as requested. The pension fund is a defined benefit scheme. My father left the company in the mid 1950s and worked there for about 15 years. He died in his 90s well beyond retirement age, 4 years ago. I think the fund has been taken over by another party who are tracing old members, they traced me via his death certificate.

His wife pre-deceased him, and his children are not dependent or in education. The fund asked me this because otherwise his wife or children would have been entitled to a pension, implying he was eligible for pension payments.

When I queried this, their response was to say "he did not elect to claim his pension" - so he must have been entitled to one. He had clearly forgotten about it (60 years had passed between him leaving the company and dying) and the fund did not contact him on his retirement, probably they did not have his current address.

The fund has said we are entitled to a small lump sum and have told me how to claim it, but they have not answered my query about whether his estate can claim his unclaimed pension. It would have been payable for 30 years, so even if a small annual amount it would be more than the lump sum mentioned. I'm aware this may have IHT implications but at the moment am just trying to find out if his estate has a claim.
Thanks

DRS1

I wonder if the scheme may have a cut off date for claiming a pension - eg if you don't claim within 6 years of the pension becoming payable you lose it.

DullGreyGuy

Marcon said:

DullGreyGuy said:

Dallascowbo said:

I have been contacted by a pension fund that my late father was a member of but did not receive any payments from. Following a tracing exercise they conducted, they wanted to know if either his wife or children were eligible to receive a pension from the fund. They were not, although apparently a small lump sum is payable.

My question is whether his estate can claim the payments he was entitled to but did not claim? I'm assuming he had forgotten about the pension and was not contacted by the fund upon his reaching retirement age.

Sounds like it was a DB scheme, in which case no. 

Depends if he was entitled to the payments in his own right by the time of his death. 

I totally misread the question, have edited 

gm0

Oh dear.  How unfortunate especially if his retirement was in any way constrained by lack of income.

What you need to be confident in what you are being told is a copy of the scheme rules.  Or if a big one - someone here with knowledge of specific scheme.

Worth checking when inherited several times from long ago paper records.  Pension admin and interpretation by junior staff can be error prone sometimes.

My speculation (and that is all it is) would be that the lump sum clause is probably related to the commencement lump sum he would have been allowed to take had he activated this pension and chosen to take that option. 
Or there is a specific clause for unclaimed pensions in deferral and estate.

The rules changed since the 1950s several times around this. And an occupational trust scheme would have reacted to some of those changes.  Back to the rule book.

Rolling up income holding it unpaid for later claiming is not standard.  Extinguishing entitlement outside scheme rules and rolling it into the pot to pay for the people who beat the actuaries is. 

Claiming late.  Early deaths. Pre-deceased spouses. etc.  All pays for long lived widows. And particularly long lived scheme members.