If you die before you take your deferred benefits

If you die before your deferred benefits are paid, there may be benefits payable to your:

• partner
• children
• nominated person or charitable organisation

This page provides general information, but you can get an estimate of what may be payable in the event of your death by using My Pension Online.

If you die before you release your deferred benefits, a death grant may be payable. The death grant is a one-off lump sum payment to a person or charitable organisation of your choice. It is paid in addition to any dependant’s pensions.

The value of the death grant depends on your dates of membership in the scheme. If you stopped contributing to your deferred LGPS pension after 1 April 2008, the death grant will be 5 x the current value of your annual pension. If you stopped contributing to your deferred LGPS pension before 1 April 2008, the death grant is usually the equivalent of the automatic lump sum retirement grant.

If you have an active LGPS account (one that you are still paying into) as well as a deferred benefit account, you will receive the death grant with the highest value, not both. The death in service grant for an active LGPS account is 3 x your pensionable pay. For more information, see Grant payable when you die

If you have more than one deferred pension account, a death grant for each pension account is payable.

If you have another LGPS account where the pension is already in payment (pensioner account), a death grant for the deferred benefit account will be payable in addition to any death grant if there is one from the pensioner account. For more information, see What happens to your pension when you die

You can tell us who you would like to receive the death grant by either:

• logging on to My Pension Online
• or completing an expression of wish form

You can nominate more than one person, allocating a percentage to each. For example:

• person A: 25%
• person B: 50%
• person C: 25%

If you have made a nomination, we will usually be able to pay the death grant straight to them without waiting for probate. The tax office may consider the money excluded from your estate and not liable for inheritance tax. If you do not make a nomination, we may have to pay your death grant to your estate, and it will be dealt with according to the terms of the law. If in any doubt, you should consult a solicitor.

While we will always do our best to fulfil your wishes, it’s important you understand that we have absolute discretion over who we pay a death grant to. In some circumstances we may not be able to pay the death grant to your nominated person or charitable organisation. These are as follows:

• the nominated person has died, or the charity is now defunct
• the nominated person was but is no longer your spouse/partner/civil partner/cohabiting partner
• the Pensions Administration Manager considers that the circumstances are such that it would not be reasonably practical to make payment to the nominated person(s) or charity

If you have an in-house AVC fund linked to your deferred benefits what happens to this depends on when you left your employment.

If you left your employment after 1 April 2014, the AVC fund will be payable as a lump sum. We have absolute discretion over who this amount is paid to, though we will always do our best to fulfil your wishes.  If you left your employment before 1 April 2014, the AVC fund must be paid directly to your estate and dealt with according to the law.

The government limits the total amount of tax-free lump sums and death benefit lump sums that can be paid in respect of someone's pension benefits to £1,073,100.

This is known as the Lump Sum and Death Benefit Allowance (LSDBA). When a member dies, the person dealing with their financial affairs is responsible for checking that the member has not exceeded the LSDBA.

If exceeded, they will need to report this to HMRC and pay the tax charge due.

View more information at Tax controls on pensions - Lump Sum and Death Benefit Allowance.

In addition to the death grant, there are annual pensions available for your qualifying partner and children.

If you have more than one LGPS account, active, deferred or pensioner, held either at Buckinghamshire or another LGPS fund, survivor’s pensions are payable for each. If you wish to, you can tell us about anyone that may be entitled to a survivor’s pension via My Pension Online but you don’t have to.

We will always ask for evidence and relevant official documents before paying out any survivor pensions.

A surviving partner’s pension may be payable to a spouse, civil partner or, if you were active in the scheme after 1 April 2008, an eligible cohabiting partner. The surviving partner’s pension is payable for life and will receive any cost of living increases due each year.

If you married or formed a civil partnership after you stopped paying in, some membership won’t be used in the calculation of surviving partner’s pension benefits. Only membership after 5 April 1978 will be used to calculate surviving partner’s pensions for widows and spouses of same sex marriages. Only membership after 5 April 1988 will be used to calculated widower’s pensions for opposite sex marriages.

If you left the scheme before 1 April 2008, a surviving partner’s annual pension for a civil partner will be based on membership after 5 April 1978. If you stopped paying into your deferred benefits between 1 April 2008 and 31 March 2014, you would have needed to make an election before 1 April 2015 to have any membership built up before 6 April 1988 be used in the calculation of your civil partner’s survivor pension.

If you paid into your deferred pension account after 1 April 2008, an eligible cohabiting partner is entitled to receive the surviving partner’s pension. To be eligible, your partner would need to meet some important criteria.

For a period of least two years before you die:

• you and your cohabiting partner must have been free to marry or form a civil partnership
• you both must have lived together as a married couple or a civil partnership
• you were financially dependent on each other, or your partner was financially dependent on you
• you and your cohabiting partner cannot have been living with anyone else as if you were married or civil partners

We will request evidence to prove this. This evidence could consist of things like joint bank account statements, utility bills, mortgage, lease or tenancy agreements. However, it’s important to understand that we don’t have an exact list of documents we require, only that whatever is presented is enough to meet the criteria. It is up to your partner to arrange and supply this evidence. Once we have this, we will decide if we need further evidence or if the criteria is met.

Membership used in the calculation will only be for deferred benefits built up after 6 April 1988, unless you made an election to pay additional contributions before 1 April 2014 to ensure earlier membership was included.

There are also pensions payable to children who are:

• under age 18
• between 18 and 23 and in full time education
• suffering from a mental or physical impairment that stops them from taking up a job working at least 30 hours a week for a period of at least 1 year

We will request evidence that children between 18 and 23 are in full time education. If the child’s application is based on the criteria for physical or mental impairment, we will also require evidence.

The amount a child receives depends on how many eligible children you have and if a surviving partner’s pension is also being paid.

If there is no surviving partner’s pension being paid, a child’s pension is worked out based on 1/240th of your pensionable pay. For two or more children it is based on 1/120th of your pensionable pay.

If there is a surviving partner’s pension being paid, one child’s pension is worked out based on1/320th of your pensionable pay. For two or more children, it is based on 1/160th of your pensionable pay.

Children eligible to receive a pension are:

• a natural child, born within 12 months of your death
• an adopted child, born before your death
• a stepchild or a child dependent on you at the date of your death and accepted by you as a member of the family (excluding sponsored children through a registered charity)

We will request evidence to prove the child’s relationship to you and their dependence on you at the date of death. There are no set criteria for what this evidence will be. This evidence will need to be supplied by the child’s guardian or surviving parent. We will be unable to award a child’s pension where the evidence is insufficient.

The way you can pay extra towards your benefits has changed over the years and some extra pension payments will not count towards the calculation of survivor’s pensions. Extra pension purchased by paying towards an Additional Pension Contributions (APCs) or a Shared Cost Additional Pension Contributions (SCAPC) will not count towards the calculation of survivor’s pension benefits.

There are no survivor’s pensions payable for Additional Regular Contributions (ARCs) paid before 1 April 2014, unless you specifically paid extra to provide them. Any membership purchased through LGPS added years (before 1 April 2008) will be included in the calculation of children’s pensions but will only be included for surviving partner’s pensions if you were married, cohabiting or in a civil partnership with them while you were still paying in.

If you were contracted out between 6 April 1978 and 6 April 1997, you will have a protection included in your deferred benefits known as a Guaranteed Minimum Pension (GMP). GMP rules are complicated, but generally this protection works to ensure your deferred benefits cannot be less at GMP age (60 for a woman, 65 for a man) than what you would have received had you contributed to the (now defunct) State Second Pension. This amount does not appear separately on any pension statement, and it will only be included in your pension benefits:

i) when you start to receive them and

ii) when you reach GMP age

If you have GMP protection then a surviving widow is entitled to receive this protection in the calculation of a surviving partner’s pension. Widowers and civil partners will only receive GMP protection in the calculation of pension benefits built-up between 6 April 1988 and 6 April 1997.

If the value of a survivor’s pension pot is under £30,000, they may be able to give up their LGPS pension rights in exchange for a one-off lump sum payment. This is called a trivial commutation. If your survivors are eligible for this option, we can supply an estimate upon request.

Survivor’s pensions are counted as earned income and will therefore be subject to any income tax payable. Death grants not paid within two years will be paid to your estate and subject to any tax payable in accordance with the law including inheritance tax and lifetime allowance charges.

If you have questions about tax payable on your estate when you die, you should consult a solicitor.