Death Benefits

Death before retirement?

If you die before your benefits have commenced, the Scheme will pay:

  • a spouse's or civil partner’s pension; and
  • children's allowances (as applicable); or
  • if no dependants’ or children’s pensions are payable, a refund of your own contributions (including your AVCs) plus interest. Interest is linked to price inflation, up to a maximum of 5% a year.

Spouse's or Civil Partner's Pension

The spouse's pension is equal to half your pension at the date you die.

This pension is payable to your spouse or civil partner (including for the avoidance of doubt where that person is of the same sex as yourself) if you are married or are in a civil partnership (i.e. in accordance with the Civil Partnership Act 2004) and are living together when you die.

If you have been married or in the civil partnership (as the case may be) for less than 6 months when you die a pension will only be paid to your spouse or civil partner if the Trustee decides it is appropriate and, where a pension is paid, the amount of the pension may be reduced. The spouse’s or civil partner’s pension may also be reduced if your spouse or civil partner is more than 20 years younger than you.

A pension may be payable if you are married or have a civil partner but are separated from your spouse or civil partner. However, the Trustee Directors may decide to pay all or part of this pension to another person if they are satisfied that this person is someone who is financially dependent on you at the date you die, such as an unmarried partner.

If you are unmarried and have no civil partner (or, if the spouse’s pension is reduced as above), the Trustee Directors have the discretion to pay that part of, or the whole of, the pension that would otherwise have been paid to another person if they are satisfied that this person is someone who is financially dependent on you at the date you die, such as your unmarried partner.

If you have more than one person who qualifies as a spouse or civil partner at the date you die, the Trustee will decide how to split the pension.

Children's Allowances

The Scheme may pay allowances to your children while they are under age 18 (or under 23 if in full-time education or training approved by the Trustee). If you retired prior to 6 April 2006, the Trustee may decide to continue any child’s allowance up to age 25, if the child is in full-time education or training approved by the Trustee, which commenced prior to their 22nd birthday.

All your children will be considered for allowances, including any legally adopted children and/or stepchildren. It is important that you tell the Trustee, in writing, about any children you may have and, in particular, any born outside marriage or who do not live with you (so that all your children can be properly considered following your death).

For one child, the allowance is a quarter of your pension at the date of your death.

For two or more children, the total allowance is a half of your pension at the date of your death. This allowance will be split equally between the children.

Refund of Contributions

To avoid Inheritance Tax, the Trustee has the final decision on who should receive the refund of contributions, however, your wishes will be taken into account wherever possible. It is very important that you let the Trustee know who you would like to be considered by completing an Expression of Wish Form, which is available from XPS Administration. You should make sure you complete a new form if your circumstances change, such as if you marry, divorce, change or acquire an adult partner or have children.

Death in retirement

If you die while you are receiving your pension, the Scheme will pay:

  • a spouse's or civil partner’s pension; and
  • children's allowances (as applicable); or
  • a cash lump sum (in certain circumstances only).

Spouse's and civil partner’s pension

The spouse's pension is equal to half the pension you were receiving or, if more, half the pension you would have been receiving if you had chosen not to take a cash lump sum or exchange pension for a dependant’s pension at retirement.

This pension is payable to your spouse or civil partner (including for the avoidance of doubt where that person is of the same sex as yourself) if you are married or are in a civil partnership (i.e. in accordance with the Civil Partnership Act 2004) and are living together when you die.

If you have been married or in the civil partnership (as the case may be) for less than 6 months when you die a pension will only be paid to your spouse or civil partner if the Trustee decides it is appropriate and, where a pension is paid, the amount of the pension may be reduced. The spouse’s or civil partner’s pension may also be reduced if your spouse or civil partner is more than 20 years younger than you.

A pension may be payable if you are married or have a civil partner but are separated from your spouse or civil partner. However, the Trustee Directors may decide to pay all or part of this pension to another person if they are satisfied that this person is someone who is financially dependent on you at the date you die, such as an unmarried partner.

If you are unmarried and have no civil partner (or, if the spouse’s pension is reduced as above), the Trustee Directors have the discretion to pay that part of, or the whole of, the pension that would otherwise have been paid to another person if they are satisfied that this person is someone who is financially dependent on you at the date you die, such as your unmarried partner.

If you have more than one person who qualifies as a spouse or civil partner at the date you die, the Trustee will decide how to split the pension.

Children's allowances

The Scheme may pay allowances to your children while they are under age 18 (or under age 23 if in full-time education or training approved by the Trustee). If you retired prior to 6 April 2006, the Trustee may decide to continue any child's allowance up to age 25, if the child is in full-time education or training approved by the Trustee, which commenced prior to their 22nd birthday.

All your children will be considered for allowances, including any legally adopted children and/or stepchildren. It is important that you tell the Trustee, in writing, about any children you may have and, in particular, any born outside marriage or who do not live with you (so that all your children can be properly considered following your death).

For one child, the allowance is a quarter of the pension you were receiving or, if more, a quarter of the pension you would have been receiving if you had chosen not to take a cash lump sum at retirement.

For two or more children, the total allowance is half of the pension you were receiving or, if more, would have been receiving if you had chosen not to take a cash lump sum at retirement. This allowance will be split equally between the children.

Cash lump sum

  • “The Scheme will make a lump sum payment if: you die less than five years after your pension started; and
  • no dependants’ or children’s pensions are payable or on the cessation of any pensions payable to your dependants or children following your death and within five years of your pension starting.

This is equal to the total of the pension payments that you would have received during the remainder of the five-year period (ignoring any future increases) less any tax-free cash sum taken by you at retirement and less any pension instalments paid to your spouse, civil partner, dependants or children.