What happens to a pension when the person dies young?

mondeoman72

I'm looking at a situation and trying to help my friend. So details are generalised.

Someone dies in their 40's. They have a pension pot in a company defined pension plan administered by zurich. The widow is about 50 years old.

Our questions are these

A letter came to the widow addressed to the deceased person. So they are probably unaware of the situation. I guess they dont know?

Does the pension transfer to the widow for when she retires, or does it typically get paid out to her now?

What, in general, happens in a typical situation like this?

Many thanks in advance. Just doing some general information gathering.

Jim2007

You need to get your hands on a copy of the terms and conditions of the fund to find the definitive answer. There may be a lump sum payment, a windows pension, dependent's pension etc… I have seen all of this in various packages..

coylemj

A letter came to the widow addressed to the deceased person. So they are probably unaware of the situation. I guess they dont know?

If she opens the letter and reads it, it will quickly clear up that uncertainty.

mondeoman72

https://www.boards.ie/discussion/comment/121997906#Comment_121997906

It ended up in a drawer last year. I will be reviewing it when I get together with her this weekend. This is why I am doing a little research now.

Obviously, she has had a lot on her plate so I am helping :)

Henry Ford III

At worst it'll form part of the deceased persons estate.

A maximum of 4 x salary can be paid out as a lump sum.

mondeoman72

There are no children and they were married. I assume this will be simple but everything else is done. I only became aware of this issue this week.

Quin_Dub

https://www.boards.ie/discussion/2058345854/what-happens-to-a-pension-when-the-person-dies-young

A lot of Company pension plans have a "death in service" payout component which may apply here.

A few phone calls to the employer or the pension firm should clear up what's required to sort everything out.

mondeoman72

https://www.boards.ie/discussion/comment/121998000#Comment_121998000

Very good point. Must sit down and talk to her about this. I have linked this thread to her so she can see it.

monkeybutter

https://www.boards.ie/discussion/comment/121997942#Comment_121997942

I hope you aren't taken advantage when you "get together"

mondeoman72

https://www.boards.ie/discussion/comment/121998142#Comment_121998142

Thanks for the attempt at humour, but not funny. He was my best friend, she is my wifes best friend, and I promised him on his death bed I would look after her. She is also reading this

3DataModem

OP, sorry for your loss.

I used to work in pensions. As said above, the outcome can widely vary depending on the terms. She might get more, she might get nothing, she might have to take an annuity out.

Peregrinus

There's an unfortunate omission in the OP where you talk about your friend having been in "a company defined pension plan". This should be either "defined benefit pension plan" or "defined contribution pension plan". The two kinds of plan calculate benefits differently, and the difference could be signficant in this context, so it would help to know which was intended.

More generally

• There'll be a pension scheme booklet which describes the benefits provided. If that is among your friend's papers, it will tell you what kind of benefit is provided on death in service. The letter your friend's widow has received probably details the amount of the benefit, or provides contact details she can follow up to find out the amount, and arrange payment.
• If you can't find the booklet, or if the letter is unclear or unhelpful, the usual thing is to ring the pension administrators, who may be in-house with your friend's employer or (more usual these days) an exertnal pension adminstration outfit that the employer has contracted with. This will be a common situation for them, and they should be able to answer questions and guide your friend's widow through the claims process. But they won't talk to you — GDPR reasons. Your friend's widow will have to deal with them herself or (possibly) will be able to deal with them herself to authorise you, to their satisfaction, to take the matter further on her behalf.

Liam Kingston

Usually, when someone passes away with a pension, the details can vary based on the specific pension plan. In many cases, the pension could be transferred to the widow, either as a lump sum or as regular payments when she reaches retirement age.

However, it's best to contact the pension provider, Zurich in this case, to get the most accurate information for your friend's situation. They can explain the options available and what steps need to be taken.

Henry Ford III

OP you'll need some documentation to enable information be passed to you.

1/. Death certificate.

2/. Marriage certificate.

I assume a grant of probate isn't available.

Occupational schemes sometimes offer members a "letter of wishes" to cover this situation. The member selects a person whom they wish to benefit.

Interestingly schemes are set up under discretionary trust, which means the trustees can ignore such a letter, depending on circumstances.

coylemj

OP needs to clarify if the deceased was still working for that company at the time of his death. The questions asked in the first post about what happens with the pension should have been answered by now by HR contacting the guy's widow and outlining the options.

If he had already left the company then she will probably have to deal with Zurich herself and will need to seek some independent advice.

Mrs OBumble

Where is the executor of the will in all this?

Quin_Dub

https://www.boards.ie/discussion/comment/122000307#Comment_122000307

I'm going to guess that like the vast majority of younger people that no will was in place.

I'd reckon that 80%+ of those under 50 don't have a will in place.

mondeoman72

The person had a slow slow decline - cancer. I will look at all this info and work through this with my friend. We appreciate all comments and welcome any more I have the cover letter, but it was part of a pack. I will get hold of it and review it, hopefully this weekend. I know the easiest think may be to just meet/talk to Zurich, but this thread is just trying to understand in the meantime

Many thanks everyone.

Mondeoman

Jim2007

https://www.boards.ie/discussion/comment/122000665#Comment_122000665

Under the circumstances I'd expect the the deceased has addressed all the legal issues….

Peregrinus

https://www.boards.ie/discussion/comment/122000307#Comment_122000307

Usually nowhere. If the scheme rules provide a pension or a lump sum payment for a surviving dependent, that benefit is due to the dependent and belongs to the dependent. It doesn't belong to the deceased and is not part of their estate, so the executor is not involved in dealing with it.

However, some schemes that provide a lump sum death-in-service benefit do allow a member to nominate who is to receive it (out of a class of permitted beneficiaries) and/or do give the trustees a discretion to select a beneficiary out of that class. If the scheme has such a rule, the the member's estate will usually be a member of the class of possible beneficiaries. So if the scheme has such a rule and if the member has nominated his estate to receive the death benefit or the trustees exercise a descretion to pay it to the estate, then thje benefit is an asset of the estate and the executor becomes obliged to collect the benefit and include it in the distribution of the deceased's estate.