What happens if I die after my pension starts? (DB Schemes, SHPS and SHAPS)


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Defined Benefit schemes (SHPS and SHAPS only)

If you die after your pension has started, the benefits payable are:

Lump sum

If you die within the first five years of your retirement then a lump sum would be payable because under the rules of your scheme, your pension is guaranteed to be paid for at least this number of years. The remaining balance of the five years of payments will be paid as a lump sum.

For example, if you were in receipt of a pension of £1,000 per year and you died after two years, there would be three years of the five year guarantee left to pay. The Lump Sum death benefit in this scenario would be £3,000.

Survivor’s pension

50% of your pension will be paid to your survivor if you chose not to take enhanced benefits when you retired. This will be calculated using the survivor’s pension quoted to you when you retired and any increases that have applied to your pension. If you chose to take an ‘Enhanced option’ on retirement, then no survivors pension is payable but there may still be an amount payable to your legal spouse.

If you were in the scheme before 6 April 2016, you may have been ‘Contracted-out’ of the Additional State Pension. If you were Contracted-out for service before 6 April 1997, there will be a Guaranteed Minimum Pension (GMP) which will be paid to your legal spouse, if you have one.

Details of who can be nominated for the Survivors Pension can be seen in the Nominees for death benefits section of your scheme Member Guide. If your survivor is more than ten years younger than you, the pension will be reduced by 2.5% for each year in excess of the ten year difference.

If you were a reduced rate member your benefits will differ. You should note that, except for legal spouses, it will be necessary for the Trustee to get confirmation that the nominee for a survivor’s pension is eligible at the date of a member’s death.

Children’s pensions

12.5% of your pension (calculated on your full pension before you took any tax-free cash and including your increases to the date of your death) would be paid to each of up to four eligible dependent children. For further information regarding the eligibility criteria for children’s pensions, please refer to your scheme guide.

You should note that the payment of death benefits is at the discretion of the Trustee. To help them understand your wishes it is important that your nominees are kept up to date by updating your details in DB Online or completing and returning a Nomination Form.