Death and Family Benefits

In the event of the death of a current, deferred or retired member, the scheme provides for the payment of lump sum on death and/or survivor benefits; subject to certain conditions. The level of benefit is dependent on the member’s circumstances at time of death.

Application for payment of death benefits must be made using the relevant application form:

• AW11 Claim for Surviving Adult Dependant Pension on death of an active member
• AW11/3 Application for Payment of a Death Gratuity to Personal Representative(s) Death on Pension or Death on Preservation of Benefits
• AW10 Death in Service – Claim for a Life Assurance Lump Sum on Death of an active member.
• AW9 Application of Award of Child Allowance.

The above forms can all be located under the ‘Bereavement Forms’ tab on our HSC Pension Scheme Forms section.

• Lump Sum on Death

  Lump sum on death

  A lump sum on death is payable to a either a widow, widower, civil partner, nominated non legal partner or a dependant. A member can elect to nominate one or more recipients to receive the lump sum on death, The member should complete and submit form DG3 if they wish to nominate a recipient/recipients.

  The nomination must specify the percentage to be paid to each nominee. This may be revoked or changed at any time. If, at the time of the death, it is not possible to pay to one or more of the nominees, the relevant percentage of the lump sum will be paid to the member’s personal representative(s) or to the estate.

  For members of the 1995 section, nominations may only be made by a member who is in pensionable employment at the time of making the nomination or a person whose pensionable employment ceased on or after 1st April 2008

  Death lump sums derived from the HSC Pension Scheme are not normally taxable if the deceased was married or was living in a civil partnership. However, if the deceased was single and the sum is to be paid as part of their estate it will be taken into account by HMRC for Inheritance Tax purposes.

  In cases where a death lump sum is being paid direct to a deceased’s estate and the value is over £5000, HSC Pension Service will require to have the amount included in any Confirmation of Estate.

  In line with HMRC rules, any payment of a lump sum on death must be paid within 2 years of death or it will attract a tax charge of up to 40%.

  The following is the level of death lump sum payable relative to both 1995 and 2008 section members.

  Members of the 1995 section:

  • Current member – 2 x the actual annual rate of pensionable pay or 2 x average annual earnings in the case of practitioner members
  • Deferred member – 3 x the preserved pension at date of death.
  • Pensioner member – if death within 5 years of retirement – the lesser of:
    • The value of five years annual rate of pension (after commutation if member elected to commute part of their pension on retirement) less pension already paid to date of death; or
    • 2 x pensionable pay less the actual lump sum received on retirement

  (a)  Death within 5 years of retirement and was not also an active member at time of death – the lesser of:

  • The value of five years annual rate of pension (after commutation if member elected to commute part of their pension on retirement) less pension already paid to date of death; or
  • 2 x member’s reckonable pay less the actual lump sum received on retirement.

  (b)  Death within 5 years of retirement and was also an active member at time of death:

  • For period of pension in payment of less than 5 years, the lesser of:
    • The value of five years annual rate of pension (after commutation if member elected to commute part of their pension on retirement) less pension already paid to date of death; or
  • 2 x reckonable pay less the actual lump sum received on retirement.For the active period of membership prior to death and if under age 65 at time of death – 5 x the value of a notional lower tier ill health pension.For the active period of membership prior to death and if over age 65 at time of death – 5 x the value of a normal retirement pension.(c)  Death within 5 years of electing to opt to take partial retirement
  • 2 x the appropriate fraction of the annual rate of reckonable pay at date of death plus the lesser of,
    • 5 x the annual pension taken under partial retirement less the pension already paid or the value of the appropriate fraction of pensionable pay on which the last option was exercised less the lump sums paid under all options.

   

  Members of the 2015 Scheme:

  • Current member – 2 x the relevant earnings in the last 12 months or 2 x the revalued pensionable earnings for the Scheme year, up to 10 years earlier, with the highest revalued pensionable earnings
  • Deferred member – deferred annual pension x 2.025.
  • Pensioner member – Please note that members of the 2008 section can take their pension and re-join the scheme. This option does not apply to members who have taken partial retirement.

  (a)    Death within 5 years of retirement and was not also an active member at time of death – the lesser of:

  The lesser of: 5 x annual pension amount less pension already paid; or 2 x the lump sum payable had they been an active member on the date of death less any retirement lump sum (commutation) already taken

  (b)    Death within 5 years of retirement and was also an active member at time of death: For period of pension in payment of less than 5 years, the lesser of:

  • The value of five years annual rate of pension (after commutation if member elected to commute part of their pension on retirement) less pension already paid to date of death; or
  • 2 x the relevant earnings in the last 12 months or 2 x the revalued pensionable earnings for the Scheme year, up to 10 years earlier, with the highest revalued pensionable earnings less the actual lump sum received on retirement.
  • For the active period of membership prior to death and if under SPA at time of death – 5 x the value of a notional lower tier ill health pension.
  • For the active period of membership prior to death and if over SPA at time of death – 5 x the value of a normal retirement pension.

  (c)    Death within 5 years of electing to opt to take partial retirement

  • the appropriate fraction of the annual rate of relevant earnings at date of death plus the lesser of,
  • the annual pension taken under partial retirement less the pension already paid or the value of the appropriate fraction of relevant earnings on which the last option was exercised less the lump sums paid under all options.
• Survivors Benefits

  Survivor benefits

  Survivor benefits can be payable to the deceased member’s:

  • Widow, Widower, Civil partner, nominated non legal partner, Dependant(s)
  • Members of the 1995 section

  Initial rate of pension following death

  There is no qualifying period for payment of an initial rate of pension. However, initial rate pensions only apply in the following circumstances.

• Deferred Members

  1995 section

  If you are a deferred member of the scheme at date of death a lump sum is payable at a rate of 3 x your deferred pension.

  Widows will then get a survivor’s pension payable for life equal to ½ the amount of the deferred pension accrued.  No short-term pension is payable.

  Widowers, nominated partners, civil partners will the get a survivor’s pension payable for life equal to ½ the amount of the deferred pension accrued based only on service from 6th April 1988.  No short-term pension is payable.

  Children’s pension will be ¼ the amount of your deferred pension per child, if there are no more than two children.  If there are more than two children the amount is shared equally among them.

  2008 section

  If you are a deferred member of the scheme at date of death a lump sum is payable at a rate of 3 x your deferred pension.

  Widows will the get a survivor’s pension payable for life equal to 37.5% the amount of the deferred pension accrued.  No short-term pension is payable.

  Children’s pension will be 18.75% of the amount of your deferred pension per child, if there are no more than two children.  If there are more than two children 37.5% is shared equally among them.

• Members of the 1995 Section

  Death in Service

  The Initial Pension is paid by HSC employers if the member was legally married or in a registered civil partnership at the date of death. Payment is made regardless of any child allowances that may be payable. The initial rate of pension is payable from the day after death, extended by any untaken annual leave, for a period of 6 months at the rate of pensionable earnings at death. Employers should notify HSC Pension Service on commencement of payment by using form AW135 Notification of Salary Related Survivor’s Pension.). The initial rate of pension is then reclaimed by the employer from HSC Pension Service at the end of the payment period.

  From 1st April 2008 a member may nominate a non-married partner to receive a survivor benefit based on scheme membership from 1st April 1988. Members of the 1995 section could have chosen to purchase their pre 1 April 1988 service to be included in survivor benefits. This choice was available during a limited time period which has now ended for 1995 section members.

  If at the time of death HSC Pension Service holds a nomination from the member any application received from the partner will need to be validated by HSC Pension Service before payment can be made.

  GP practice staff will be paid by HSC Pension Service as at present for a period of 6 months.

  • Widow
    • ½ rate pension based on a notional tier 2 ill health pension for all membership.
  • Widower, Civil Partner, Nominated Non legal partner
    • ½ rate pension based on notional tier 2 ill health pension for membership only from 1.4.88.

  If the member has purchased pre 6th April 1988 service in respect of their surviving partner then this would be added to the service figure pre any enhancement.

  An initial pension is paid by HSC Pension Service if the member was legally married or in a registered civil partnership. The initial rate is payable for a period of 3 months and is extended to 6 months if there are dependent children.

  Death on pension

  • Widow
    • ½ rate pension based on pension in payment.
  • Widower, Civil Partner, Nominated Non legal partner.
    • ½ rate pension based on membership only from 1st April 1988.

  • Widow
    • ½ rate pension based on a notional tier 2 ill health pension for all membership up to date of leaving.
  • Widower, Civil Partner, Nominated Non legal partner
    • ½ rate pension based on notional tier 2 ill health pension for membership up to date of leaving but only for membership from 1.4.88.

  Death within 12 months of leaving the scheme

  If the member has purchased pre 6th April 1988 service in respect of their surviving partner then this would be added to the service figure pre any enhancement.

  Long term pension

  The rate of long term pensions are determined by marital status and status of membership at time of death. To be entitled to a long term pension the deceased member must have completed the minimum period of membership required for payment of a benefit from the scheme.

  Death with preserved benefits

  • Widow
    • ½ rate pension based on preserved pension.
  • Widower, Civil Partner, Nominated Non legal partner
    • ½ rate pension based on preserved pension for membership only from 1st April 1988.

  If the member has purchased pre 6th April 1988 service in respect of their surviving partner then this would be included.

• Members of the 2008 section

  Initial rate of pension following death

  As with the 1995 section, there is no qualifying period for payment of an initial rate of pension. However, initial rate pensions only apply in the following cases:

  Death in service

  The pension is paid by HSC employers if the member was legally married or in a registered civil partnership. Payment is made regardless of any child allowances that may be payable. The initial rate of pension is payable from the day after death for a period of 6 months at rate of pensionable pay salary on death. HSC Pension Service should be notified at the start of payment by using form AW135. The initial rate of pension is then reclaimed by the employer from HSC Pension Service at the end of the period.

  GP practice staff will be paid by HSC Pension Service as at present for a period of 6 months.

  A member may nominate a non-married partner to receive a survivor benefit. If at the time of death HSC Pension Service hold a nomination from the member any application received from the partner will need to be validated by HSC Pension Service before any payment can be made

  Death on pension

  The pension is paid by HSC Pension Service if the member was legally married or in a registered civil partnership. The initial rate is payable for a period of 3 months and is extended to 6 months if there are dependent children.

  Death of re employed pensioner

  If the deceased was a pensioner who had re-joined the scheme after taking payment of their benefits the initial rate is 6 months.

  Long term pension

  To be entitled to a long term pension the deceased member must have completed the minimum period of membership required for payment of a benefit from the scheme.

  Death in service

  • Widow, Widower, Civil Partner, Nominated Non legal partner
    • Pension at rate of 37.5% based on a tier 2 ill health pension for all membership. Death within 12 months of leaving the scheme with entitlement to a preserved pension
  • Widow Widower, Civil Partner, Nominated Non legal partner
    • Pension at rate of 37.5% based on a tier 2 ill health pension for all membership up to date of leaving.

  Death with preserved benefits

  • Widow Widower, Civil Partner, Nominated Non legal partner
    • Pension at rate of 37.5% based on preserved pension.

  Death on pension

  • Widow Widower, Civil Partner, Nominated Non legal partner
    • Pension at rate of 37.5% based on pension in payment.

  Death re employed pensioner

  • Pension at rate of 37.5% based on pension in payment taking into account any abatement of pension also,
  • Pension at rate of 37.5% based on re employed active membership at time of death.

  Additional Pension (AP) purchased for surviving partner

  A member can make additional provision for survivor benefits by purchasing AP to include additional survivor cover. The Basic AP purchased is revalued in line with any changes arising from the Pensions Increase Act between the date the option commenced and point of payment. For completed contracts the surviving partner will receive 37.5% of the amount of increase that the member would have received.

  If the contract to purchase is not completed at time of death, the following will apply: Death within 12 months of taking out the option

  The contributions to the member/members personal representative are refunded by HSC Pension Service. If the employer had opted to make additional pension payments then HSC Pension Service would also refund those payments to the employer.

  Death after 12 months of taking out option

  The surviving partner will receive an increase equal to that of a completed contract.

• Members of the 2015 Scheme

  Initial rate of pension following death

  As with the 1995/2008 section, there is no qualifying period for payment of an initial rate of pension. However, initial rate pensions only apply in the following cases:

  Death in service

  The pension is paid by HSC employers if the member was legally married or in a registered civil partnership. Payment is made regardless of any child allowances that may be payable. The initial rate of pension is payable from the day after death for a period of 6 months at a rate of pensionable pay on death. HSC Pension Service should be notified at the start of payment by using form AW135. The initial rate of pension is then reclaimed by the employer from HSC Pension Service at the end of the period.

  GP practice staff will be paid by HSC Pension Service as at present for a period of 6 months.

  A member may nominate a non-married partner to receive a survivor benefit. If at the time of death HSC Pension Service hold a nomination from the member any application received from the partner will need to be validated by HSC Pension Service before any payment can be made.

  Death on pension

  The pension is paid by HSC Pension Service if the member was legally married or in a registered civil partnership. The initial rate is payable for a period of 3 months and is extended to 6 months if there are dependent children.

  Death re employed pensioner

  If the deceased was a pensioner who had re-joined the scheme after taking payment of their benefits the initial rate is 6 months.

  Long term pension

  To be entitled to a long term pension the deceased member must have completed the minimum period of membership required for payment of a benefit from the scheme.

  Death in service

  • Widow, Widower, Civil Partner, Nominated Non legal partner
    • Pension at rate of 33.75% based on a tier 2 ill health pension for all membership. Death within 12 months of leaving the scheme with entitlement to a preserved pension
  • Widow Widower, Civil Partner, Nominated Non legal partner
    • Pension at rate of 33.75% based on a tier 2 ill health pension for all membership up to date of leaving

  Death with preserved benefits

  • Widow Widower, Civil Partner, Nominated Non legal partner
    • Pension at rate of 33.75% based on preserved pension.

  Death on pension

  • Widow Widower, Civil Partner, Nominated Non legal partner
    • Pension at rate of 33.75% based on pension in payment.

  Death re employed pensioner

  • Pension at rate of 33.75% based on pension in payment taking into account any abatement of pension also,
  • Pension at rate of 33.75% based on re employed active membership at time of death.

  Additional Pension (AP) purchased for surviving partner

  A member can make additional provision for survivor benefits by purchasing AP to include additional survivor cover. The Basic AP purchased is revalued in line with any changes arising from the Pensions Increase Act between the date the option commenced and point of payment. For completed contracts the surviving partner will receive 33.75% of the amount of increase that the member would have received.

  If the contract to purchase is not completed at the time of death, the following will apply: Death within 12 months of taking out the option.

  The contributions to the member/members personal representative are refunded by HSC Pension Service. If the employer had opted to make additional pension payments then HSC Pension Service would also refund those payments to the employer.

  Death after 12 months of taking out option

  The surviving partner will receive an increase equal to that of a completed contract.

• Child Allowance all sections

  An allowance is now payable to a dependent child of a member whose pensionable service ended on or after 1st April 2008, until they reach age 23. An allowance can only continue to be paid after that age to a child who is incapable of earning a living because of permanent physical or mental infirmity which existed at the date of death.

  The allowance will be paid from the day after the date of death by HSC Pension Service.

  Child allowances are either a proportion of a notional tier 2 ill health pension based on the member’s service or 10 years membership, whichever is the most beneficial to the child. In the case of a member who worked part time any benefit would be scaled down accordingly.

  Application for payment can be made by completing form AW9.

• Survivors Guide

  Survivors Guide