PSI12.1.3 - Benefits on Death after Retirement: Pension Benefits – Allocated Pensions - Method of Allocation

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

An allocated pension is usually provided in one of the following ways:

1. the member retains part of his/her own pension and an entirely separate pension is provided for his/her widow/widower after his/her death,
2. the retirement pension may be expressed as payable in the same amount throughout the joint lives of the member and his/her spouse. This is known as a joint lives and survivorship annuity. This means that the member’s own pension is reduced when payment begins so that the joint lives pension and the member’s original scheme pension have the same capital value,
3. a joint lives and survivorship annuity which reduces on the death of one of the spouses.

The same general principles also apply to allocated pensions for dependants. The allocated pension described in PSI12.1.3(a) cannot be paid to the member’s spouse or dependant while the member is still alive. However it can start after the member’s death even if the widow’s, widower’s or dependant’s own right pension is not then payable, because, for example, of a pension guarantee (see PSI12.1.30a).

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