what happens if i die before taking my pension and after reaching my normal pension age (NPA)?

If you have completed a Deferral of Pension Form but die before you take your pension, you will be treated as though your pension had started on the day immediately before your death, rather than your NPA.

If you have not completed a Deferral of Pension Form, and you die before you take your pension, you will be treated as if you had retired at your NPA, and your benefits backdated to that date.

The benefits payable in these two scenarios are different.

Death in circumstances where you have chosen to defer your pension

You will be treated as though you retired on the day immediately before your death. The Fund will pay a lump sum equal to five years’ of pension.

The Trustee will choose who gets the lump sum, from amongst your potential beneficiaries (although the Trustee would usually take account of your Expression of Wish form). As the law stands at the moment, this lump sum should not form part of your estate and should not therefore be subject to inheritance tax. To help the Trustee decide, members are encouraged to keep their Expression of Wish form up to date.

If you leave a spouse or civil partner, the Trustee would also pay a pension to them. This pension will be uplifted by the application of an actuarial factor between your NPA and your date of death. This factor will change from time to time.

Death in circumstances where you have not chosen to defer your pension

Within 5 years of NPA

If you die within five years after your NPA, your estate will receive a lump sum of back payments from your NPA to your date of death, which may be subject to inheritance tax.

The remainder of the lump sum is in respect of pension payments between your date of death and the fifth anniversary of your NPA. The Trustee has discretion to decide the person(s) to whom this element of the lump sum is paid. The Trustee will choose from amongst your potential beneficiaries (although the Trustee would usually take account of your Expression of Wish form). As the law stands at the moment, this part of the lump sum should not form part of your estate and should not therefore be subject to inheritance tax. To help the Trustee decide, members are encouraged to keep their Expression of Wish form up to date.

More than 5 years of NPA

If you die more than five years after your NPA, your estate will receive a lump sum of back payments from your NPA to your date of death. As these back payments will be paid to your estate, they may be subject to inheritance tax.

What is the best option for me?

It is not possible to say, before somebody dies, which is better. This is because it will depend on a number of variables, including:

  • How old you are when you die;
  • What actuarial factors are in force at the time;
  • What proportion of your pension is GMP;
  • Whether you have a spouse or civil partner at the date of your death.

What else should I consider?

To make things easier on your family in the event of your death, you should make sure they know about your membership in the Fund, where they can get information about the Fund and the contact details of the Administration Team. You should let them know about this website, as it contains useful information for them should they need to contact the Fund.

You should also make sure that the Fund knows your current contact details, as this will help avoid confusion.

Keeping your Expression of Wish form up to date

It is important that the Trustee knows who you would like any lump sums to be paid to in the event of your death. To do this, you should make sure your Expression of Wish form is up to date. You can download a blank form by clicking here. When you have completed and signed the form, you can send it to the Administration Team.

The Trustee is not legally bound to pay any benefits in accordance with your wishes, but it will take them into account when making its decision.