Finance Act 2004

167 Pension death benefit rules

(1) These are the rules relating to the payment of pension death benefits by a registered pension scheme in respect of a member of the pension scheme (“the pension death benefit rules”).

• Pension death benefit rule 1

  No payment of pension death benefit may be made otherwise than to a dependant of the member.

• Pension death benefit rule 2

  No payment of pension death benefit other than a dependants' scheme pension may be made in respect of a defined benefits arrangement.

• Pension death benefit rule 3

  If a dependant has not reached the age of 75, no payment of pension death benefit to the dependant other than—

  (a)

  a dependants' scheme pension,

  (b)

  a dependants' annuity, or

  (c)

  dependants' unsecured pension,

  may be made to the dependant in respect of a money purchase arrangement; but a dependants' scheme pension may only be paid if the member or dependant had an opportunity to select a dependants' annuity instead.

• Pension death benefit rule 4

  The total amount of dependants' unsecured pension paid to a dependant in each unsecured pension year in respect of a money purchase arrangement must not exceed 120% of the basis amount for the unsecured pension year.

• Pension death benefit rule 5

  If a dependant has reached the age of 75, no payment of pension other than—

  (a)

  a dependants' scheme pension,

  (b)

  a dependants' annuity, or

  (c)

  dependants' alternatively secured pension,

  may be made to the dependant in respect of a money purchase arrangement; but a dependants' scheme pension may only be paid if the member or dependant had an opportunity to select a dependants' annuity instead.

• Pension death benefit rule 6

  The total amount of dependants' alternatively secured pension paid to a dependant in each alternatively secured pension year in respect of a money purchase arrangement must not exceed 70% of the basis amount for the alternatively secured pension year.

(2) “Pension death benefit” means a pension payable on the death of the member (other than a member’s pension payable after the member’s death under pension rule 2: see section 165).

(3) Part 2 of Schedule 28 gives the meaning of expressions used in the pension death benefit rules.