PSI12.2.2 - Benefits on Death after Retirement: Lump Sum Benefits and Pension Guarantees - Forms of Lump Sum Benefit

(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)

[PN12.1]

(This text has been withheld because of exemptions in the Freedom of Information Act 2000)

The only lump sum payments permissible on death after retirement are therefore:

6. a payment under a pension guarantee (see PSI25.2.14 where a member dies during income drawdown), and/or
7. any sum falling due under continued life insurance cover.

In addition, where a member of a contracted-out money purchase scheme (see PSI20.1.13) dies after retirement but before State Pension Age (see PSI6.1.16) and there is no qualifying widow or widower, we have no objection to the payment of the Protected Rights benefits where appropriate as a lump sum to a nominated beneficiary or to the member’s estate. Such a payment is not treated as a lump sum retirement benefit.