RPSM10105020 - Technical Pages: Death benefits: Lump sums pre 6 April 2011: Who may be paid a benefit

Who a lump sum death benefit may be paid to

A lump sum death benefit does not have to be paid to a dependant of the member. It may be paid to any nominated beneficiary, including a company, trust, charity or the member’s legal personal representatives. A lump sum death benefit may also be paid at the discretion of the scheme administrator or scheme trustees. The scheme rules will set out to whom a lump sum death benefit may be paid for a particular scheme.

The exceptions are where

• either a trivial commutation lump sum death benefit or a winding-up lump sum death benefit is paid, which must be paid to a dependant (as it is a dependant’s pension entitlement being commuted through the payment),
• a charity lump sum death benefit is paid, which must be paid to a charity, or
• a transfer lump sum death benefit is paid, which must be used to generate rights under the paying scheme for another scheme member (who is not a dependant of the deceased member).

Within the above confines, there is no objection to more than one individual or beneficiary being paid a lump sum death benefit under a particular arrangement.