PART 8Death benefits
CHAPTER 4Payment of lump sum death benefits
Payment of lump sum death benefitI1121
1
A lump sum death benefit F1may be paid where—
a
an active, deferred or pensioner member of this scheme dies; or
b
a pension credit member of this scheme dies before any benefits attributable (directly or indirectly) to a pension credit become payable.
2
But a lump sum death benefit is not payable where—
a
a pensioner member who is not also an active member dies more than 5 years after the member’s full retirement pension or ill-health pension becomes payable; or
b
a member who dies had reached the age of 75.
3
The lump sum death benefit must be paid within the period of 2 years beginning with the earlier of—
a
the day on which the scheme manager first knew of the member’s death; and
b
the day on which the scheme manager could reasonably be expected to have known of the member’s death.
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Nominations for lump sum death benefitsI2122
1
A member of this scheme may nominate a person or persons to receive a lump sum death benefit.
2
The member may nominate—
a
one or more individuals;
b
one incorporated or unincorporated body; or
c
one or more individuals and one incorporated or unincorporated body.
3
A nomination may specify how payments are to be apportioned between—
a
2 or more individuals; or
b
one or more individuals and one incorporated or unincorporated body.
4
A nomination may only be made by signed notice to the scheme manager in a form the scheme manager requires or is willing to accept.
5
A member may revoke or alter a nomination by a further signed notice to the scheme manager in a form the scheme manager requires or is willing to accept.
Invalid nominations of individualsI3123
1
If the nomination of an individual is invalid, any lump sum death benefit that would have been payable to the individual is payable to the member’s personal representatives.
2
A nomination of an individual is invalid if—
a
the individual nominated is the member’s spouse or civil partner and the individual is not the member’s spouse or civil partner when the member dies;
b
the individual predeceases the member; or
c
the individual is convicted of the offence of murder of the member.
3
The scheme manager may determine that the nomination of an individual is invalid if the individual is convicted of manslaughter of the member or any other offence (apart from murder) of which the unlawful killing or wounding of the member is an element.
Payment of lump sum death benefit to nominees or personal representativesI4124
1
The scheme manager may pay a lump sum death benefit to—
a
the person or persons nominated by the member under regulation 122 (“the nominees”);
b
the member’s personal representatives; or
c
both the nominees and the member’s personal representatives.
2
If the scheme manager decides to pay all or part of the lump sum death benefit to the nominees and more than one individual has been nominated, the payment is to be made to them—
a
in the proportions specified by the member in the nomination; or
b
if the member has not specified proportions, in the proportions the scheme manager considers appropriate.
3
If the scheme manager decides to pay the lump sum death benefit to both the nominees and the personal representatives, the payment is to be made to them in the proportions the scheme manager considers appropriate.
Pension protection lump sum death benefitI5125
1
A lump sum death benefit is treated for the purposes of the 2004 Act as a pension protection lump sum death benefit if and to the extent that—
a
the member has given written notice to the scheme manager that the lump sum death benefit is to be so treated; and
b
the lump sum death benefit meets all of the conditions required by the 2004 Act for it to be treated as a pension protection lump sum death benefit (see paragraph 14 of Part 2 (lump sum death benefit rule) of Schedule 29 to the 2004 Act65).
2
Tax may be deducted from the lump sum death benefit if the scheme manager is liable for tax under section 206 (special lump sum death benefits charge) of the 2004 Act66 in respect of a pension protection lump sum death benefit.
Recovery of paymentsI6126
1
The scheme manager may recover a lump sum death benefit paid to any person if the person’s nomination is subsequently found to be invalid.
2
Paragraph (1) does not affect any other right the scheme manager has to recover a payment or an overpayment.
Payment of pension instead of lump sum for members who have reached 75I7127
1
This regulation applies if a member dies–
a
after reaching the age of 75; and
b
before the fifth anniversary of the date on which a pension became payable to the member.
2
The scheme manager may pay the pension to—
a
the person or persons nominated by the member under regulation 122 (“the nominees”);
b
the member’s personal representatives; or
c
both the nominees and the member’s personal representatives.
3
The scheme manager is to pay the pension in the proportions the scheme manager considers appropriate if—
a
the scheme manager decides to pay all or part of the pension to the nominees and more than one individual has been nominated; or
b
the scheme manager decides to pay the pension to both the nominees and the personal representatives.
4
A pension payable under this regulation—
a
is payable for the pension protection period; and
b
must be equal to the sum of—
i
the pension that would have been payable to the member had the member lived until the end of the pension protection period; and
ii
any increases in the annual rate of that pension under the 1971 Act during that period.
5
In this regulation “the pension protection period” means the period beginning with the day of the member’s death and ending with the day before the fifth anniversary of the date on which the member’s pension became payable.