Private pension no payout to children over 18

greeneyes1785

My M.I.L. passed away unexpectedly she was on benefits but we found out she had a private pension from decades ago.
My s.i.l. sent in forms to claim but she just got back saying they don't pay out to children over 18?! 
My m.i.l. was never married and didnt have a partner at the time of her passing.
Where will this money go? Is there a way they can claim it still?

33scott

Is this a DB or a DC pension?

Silvertabby

If the pension was a really old one, it's possible that it was a DB scheme, which typically only pay survivor's benefits to eligible spouses and (minor)  children.

Can you post the name of the scheme, how long your MIL was a contributing member, and if she had started to draw these benefits before her death?  

Exodi

Presumably this is a DB scheme. It will depend on the particular scheme rules but generally it is paid to dependents, which is typically defined as a spouse or children under 23.

If your sister is in her 50s with her own life and children (for example), she's unlikely to fit the definition of what the scheme might consider a 'dependent'.

greeneyes1785 said:

Where will this money go? Is there a way they can claim it still?

There is no money to go anywhere. A DB pension is an agreement that they will pay you a certain amount for as long as you live (and possibly to your dependents). If you die, the agreement ends.

It's not like a DC pension where there is a pot of money being drawn from, that can be passed down. But this goes both ways, while you can run out of money in a DC scheme, you don't have this problem with a DB scheme that will happily keep paying out, even as you celebrate your 110th birthday.

FWIW many people would kill to have a DB pension (which were largely removed from the private sector many decades ago).

Brie

33scott said:

Is this a DB or a DC pension?

OP said private pension so it should then be like a DC and that should be available to the family in some form.

If the admins have said there's no payout then it may very well be a work pension, DB which often used to have a "orphans pension" available that would pay sometimes up to age 25 if the "child" was still in full time education.  Unless the DB pension was already in payment this might change what happens.

greeneyes1785

I will check with my s.i.l. but it sounds like it would of been a dB if they won't payout.
Could it be payable to grandchildren under 18?

DE_612183

greeneyes1785 said:

I will check with my s.i.l. but it sounds like it would of been a dB if they won't payout.
Could it be payable to grandchildren under 18?

no, grandchildren would not be dependants 

Marcon

Brie said:

33scott said:

Is this a DB or a DC pension?

OP said private pension so it should then be like a DC and that should be available to the family in some form.

If the admins have said there's no payout then it may very well be a work pension, DB which often used to have a "orphans pension" available that would pay sometimes up to age 25 if the "child" was still in full time education.

A private pension could be either DB or DC - to most people the word 'private' it just means 'non-state'. 

greeneyes1785 said:

I will check with my s.i.l. but it sounds like it would of been a dB if they won't payout.
Could it be payable to grandchildren under 18?

Highly unlikely, I'm afraid. The rules will stipulate exactly who might qualify for a 'survivor' pension and it would be extremely unusual to include grandchildren.

Exodi

greeneyes1785 said:

I will check with my s.i.l. but it sounds like it would of been a dB if they won't payout.
Could it be payable to grandchildren under 18?

I think you're not grasping what is being said about DB pensions here.

A DB pension is an agreement to pay a certain amount of money to someone until they die, and also potentially to their dependents (spouse, nominated partner or children (in this case as under the age of 18)) - because their dependents were financially dependent day to day on the person while they were alive. 

Your adult SIL is not a dependent of your late MIL. Nor are her children.

There is no pot of money with your MIL's name on, the pension scheme will pay it out for however long or short they are obliged to. That obligation has ended as she has no dependents. Some people will 'win' by living for a very long time and receiving more than they might have put in, some people will not, it's the same with the state pension.

I presume your MIL was receiving payment from the pension while she was alive?

Eldi_Dos

DE_612183 said:

greeneyes1785 said:

I will check with my s.i.l. but it sounds like it would of been a dB if they won't payout.
Could it be payable to grandchildren under 18?

no, grandchildren would not be dependants 

Are you sure about that, it is not that uncommon for grandparents to be bringing up grandkids for whatever reason.
I would have thought with some schemes that trustees would have a degree of discretion but would be interested to hear others knowledge in this area.

Marcon

Eldi_Dos said:

DE_612183 said:

greeneyes1785 said:

I will check with my s.i.l. but it sounds like it would of been a dB if they won't payout.
Could it be payable to grandchildren under 18?

no, grandchildren would not be dependants 

Are you sure about that, it is not that uncommon for grandparents to be bringing up grandkids for whatever reason.
I would have thought with some schemes that trustees would have a degree of discretion but would be interested to hear others knowledge in this area.

It's not usually a matter of financial dependency (that tends to be the test for unmarried adult partners, although it can extend to broader definitions such as 'mutual financial dependence'), but rather the definition in the rules of 'eligible child' - and I've never seen that include grandchildren unless legally adopted by the grandparents.