RPSM10105390 - Technical Pages: Death benefits: Lump sums pre 6 April 2011: Member dies aged 75 or over: Payment only where there are no dependants
This guidance only covers the position where the member died before 6 April 2011. If the member died on or after 6 April 2011 see RPSM10106000.
A charity lump sum death benefit or transfer lump sum death benefit can only be paid where there are no dependants of the member left alive
| [Para 18(1)(b) and (2)(b) and 19(1)(b) and (2)(c), Sch 29] |
A charity lump sum death benefit or transfer lump sum death benefit cannot be paid where a member dies leaving a dependant. Here the member’s alternatively secured pension fund must first be used to provide that (or those) dependant(s) with a pension death benefit (see RPSM10104770).
Where a dependant becomes entitled to a dependants’ unsecured pension, and subsequently dies before reaching age 75, any remaining dependants’ unsecured pension fund left on their death may be paid as an unsecured pension fund lump sum death benefit - see the example in RPSM10104930.
Where a dependant in receipt of a dependants’ alternatively secured pension dies where another dependant of the member is still alive at that point, the remaining dependants’ alternatively secured pension fund must again be used to provide a pension death benefit for that other dependant.
When that second dependant dies the same principles apply as above. So if the dependant is in receipt of a dependants’ unsecured pension an unsecured pension fund lump sum death benefit may be paid. If the dependant is in receipt of a dependants’ alternatively secured pension then, in the event that there is a third dependant of the member, that surviving dependant must again be provided with a pension death benefit with the remaining funds. And so on.
When that last dependant of the member dies any remaining dependants’ alternatively secured pension fund may be paid as a charity lump sum death benefit or transfer lump sum death benefit.
The example on RPSM10105430 illustrates this.
Any dependant may of course at any time use all or part of their dependants’ unsecured pension fund or dependants’ alternatively secured pension fund to purchase a dependants’ annuity (or, where offered by the scheme, a dependants’ scheme pension).
| Glossary (RPSM20000000) |
