Works Pension

[yansee]

My friend has asked me to find out about a works pension he`s due next year,ha want`s to know what happens to it after he dies does it die with him,he`s single with one child ?

[fiction-factory]

Has he nominated someone to the Trsteees? he needs to do that. Is the child dependent on him- still living with him?

[yansee]

Thank`s for your reply,i dont know i`ll ask him today

[mikey4444]

FF has it right here. All "works" pension have a facility so that scheme Members can nominate someone to receive any residual pension, in the event of death, either before or after retirement.

But this "expression of wish" is discretionary. This is because the Trustees of the Scheme will have to decide if the Expression of wish" is still relevant. For instance, the person nominated may have died, so that any payment couldn't be made. The Trustees will then need to make enquiries as to how to proceed.

That expression can be changed as many times as the Member wants.

Bear in mind, that if death occurs when the nominated person is still a minor, then the Trustees will need to put the resultant residual pension into some kind of trust.

[fiction-factory]

Also, he should bear in mind that the residual pension will be lower than the full pension- typically half

[mikey4444]

Yes, that is right FF.

[naomi24]

//All "works" pension have a facility so that scheme Members can nominate someone to receive any residual pension//

That's not true. I've recently been dealing with a works pension for someone who's just died and that doesn't allow for anyone else to claim it. The pension has died with him. You need to look at the terms of the contract.

[fiction-factory]

Naomi is right- it depends on the terms of the scheme, although most do have teh provision. Similarly the state pension is not paid to dependents after death

[yansee]

Thank you all for your help

[mikey4444]

Yansee....your friend needs to liaise with the Trustees.

[twix123]

Coming into this rather late, but the question asked was what happens to the pension after he dies, whereas most of the answers seem to relate to his demise prior to taking the pension.

Prior to taking his pension he should be contacted by the Administrators/Trustees giving advising him of the options available under the terms of the scheme. These may include:
a) equal payments until his death;
b) a lower starting figure with annual increases allowing for inflation;
c) a tax free lump sum, again with lower starting pension payments as in options a & b above;
d) a lump sum to purchase an annuity from another provider.

If he were married there may also be the option to take an even lower pension under options a & b above, with either a half or one third pension being paid to his spouse, from his death until her demise.

I have not heard of a child being able to receive payment under the terms of a parent's pension, especially due to the longer life expectancy of a child, except where the the terms of the pension include payment for a minimum period and the pensioner dying within that period (the residue of the pension payment being paid to the pensioners estate). Naturally my information may be out of date due to the vast number of changes that have been made to pension schemes in the last few years.

If the value of his pension fund warrants it, I would advise him to speak with an Independent Financial Advisor to discuss his various options.

[cupotee2]

I can only quote from my other half's "works" pension.

He retired at 65 with a small works pension.
Had he passed away before he was 70, I would have been able to claim it until he would have been 70, then it also died.
As it happens he has lived another 20 years, so far and still claiming it.
Definitely depends on the original policy.

[woofgang]

Mine is different again. Could only be passed on to spouse or named partner not child or anyone else and I get a percentage of the pension for the rest of my life. Basically your friend needs to read the t's and c's of his own pension....bit surprised TBH that he hasn't already done that and also asked his employer.