PSI20.1.44 - Funding and Surpluses: Funding General - Death Benefits - In Service

(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)

[PN13.13]

The majority of schemes use term life insurance policies to provide for death in service benefits in so far as those benefits exceed the current value of funding for retirement benefits. In schemes where contributions are calculated separately for each member that is, individual arrangements, earmarked schemes and small self-administered schemes, the insurance should be calculated annually so as to produce as closely as possible the balance of benefits payable under the scheme rules in the event of the employees death in the coming year. For this purpose it may normally be assumed that in the case of a male employee he is married to a wife 3 years younger than himself, and in the case of a female employee, that she is married to a husband 3 years older than herself.

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