Unclaimed Private Pension

Marcon

Dallascowbo said:

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

Just to do a bit of expectation management....If your father left the company in the mid 1950s, it was very common for anyone leaving employment before reaching their scheme's retirement age to get a refund of personal contributions (assuming it had been a contributory scheme - otherwise they'd get nothing) and that was their lot. 'Preservation' (the right to a pension payable at a later date) was only introduced for those leaving active membership of a scheme after 5 April 1975, so this scheme is unusual in that respect.

Be aware that pensions were genuinely 'frozen' for someone who left a scheme in the 1950s, unless the rules of their scheme provided for anything better than that. There was no legal requirement to do so. If he had 15 years service in a 1/60ths scheme (which was pretty typical in those days), his pension would be 15/60 x pensionable salary -  in 1955 average pay was around £500 a year, so unless he was earning well above average, the pension might be in the order of £10 or so a month.

I'd write to the scheme and:

• point out that your father appears to have had no communication from them since leaving the company in the mid 1950s, and ask why no attempt was made to trace him until now
• ask them to let you have a copy of the relevant section of the scheme rules covering the situation where a member did not apply for their pension when they reached the scheme's retirement age
• ask if the trustees have a discretion to backdate pension payments to the scheme's retirement age and if so, please could they be asked to do so. [It's likely there is a 'cut off' date - 6 years, as mentioned above, is common, but depends on the rules of the scheme]
• ask how the small lump sum has been calculated. [The answer might well be that it represents the last xx years of pension payments because he didn't claim at the point of retirement and has thus lost the right to any payments before then. If that is the answer, then the estate has no claim.]