USS pension - what happens to Investment Builder on death?

Kingfisher66

Hello

I see there's a few USS queries on here but none addressing my concern - which is what happens to the Investment Builder pot when you die? From what I can work out, it's not directly inheritable - which is surely a big downside of keeping funds in there after you've retired? My situation is that I have (been) retired from USS employment - I took VS and put that sum together with previous overpayments into the Investment Builder which is now £75k. I'm wondering what to do with this longer term. I'm 60 and taking my USS pension while also working/paying into LGPS. As others have said, the fact there are zero investment fees is a benefit and it's possible to make 4 withdrawals a year mean the Investment Builder can operate like a draw-down fund. But unlike other products, when I die, it dies with me? I have no spouse but 3 children. Is there a better way to pass those funds onto my children, while taking just the interest annually?

Thanks for any thoughts/pointers/info on your experience.

NoMore

It's just a DC pension, so like other DC pensions, you should be able to nominate beneficaries on death and the trustees of the scheme should then consider this when the time comes.

Marcon

https://forums.moneysavingexpert.com/discussion/6653444/uss-pension-what-happens-to-investment-builder-on-death

Maybe look at the info on the USS website, which should set your mind at rest: https://www.uss.co.uk/for-members/your-retirement-journey/what-will-loved-ones-and-beneficiaries-receive

In particular note: 'Any Investment Builder savings that remain invested when you die will be paid to your beneficiaries.'

poseidon1

As indicated by @NoMore, your Investment Builder is no different from other DC schemes and pays out the fund value on death, to beneficiaries you nominate in your expression of wish. Therefore make sure that it is up to date and in place with the trustees.

IHT may or may not be a concern for your estate, however bear in mind after 2027 your Investment Builder will potentially become IHT liable. That may well dictate whether you decide to take it during your lifetime or leave it to your children.

Tomatillo

Does anyone know exactly what happens with inherited investment builder funds? Are they automatically cashed in and paid out as a lump sum to the beneficiaries, or can they be left invested and drawn on when the beneficiaries want to do so?

I am partly asking this as I am wondering how it interacts with the LSDBA, presumably if it's a lump sum it is all tested against that, but I thought I had read something that said if the pension were used as drawdown by the beneficiary that would not be the case.

Actually I am not sure how it works with a SIPP either.

Sadly this is likely to be a practical issue for us in the near future, but I am finding it very hard to get an 'official' answer