Pension company not releasing my dads pension benefits to my mum

[PoshBiscuits]

My mum and dad separated many years ago but never divorced. My dad passed away earlier this year. He was ill for a while, and whilst he was ill he wrote in an e mail to me and my mum that he wanted 50% of his pension to go to my mum. His pension was considerable.

The pension company are now refusing to pay out as they lived at different addresses. I am looking for advice on whether this is legal and how we can fight this. Any advice much appreciated.

It does depend on the expression of wish form normally, and even the the Trustees of the scheme have more power than you think as to whether they follow it. I don't think an email would have helped - but as the others have said, who did you think was going to receive the other half of the pension, did he have a partner or young children?

I think the OP might mean that the surviving spouse was entitled to 50% of the pension her Dad was receiving under a defined benefit scheme. NOT that he sought to split the pension pot between two beneficiaries. Perhaps she could confirm as it is confusing.

An expression of wish form is not binding on the scheme's trustees. If, for example, someone dies leaving behind a spouse and young children, the trustees will take their needs into consideration even if the expression of wish form cuts them out completely.

The fundamental question, which hasn't been answered, is what do the pension scheme's rules say. If they say unequivocally that a surviving spouse benefits, they must follow that, and the fact the OP's parents were no longer living together is irrelevant. However, if they say that it is in the discretion of the trustees or stipulate that a surviving spouse can only inherit if the couple are still together, they can refuse to give anything to OP's mother.

You might be right Ana, I think my DH's pension scheme is 50% to the spouse and there is an additional child's pension on top of that if the child is young enough to qualify (which our child would, at present). But I'd only get 50% even if there was no child either tbh.

I'm a widow and I know my defined benefit pension will die with me now I don't have a spouse or dependants.

I imagine they're arguing they were no longer a couple so there's no beneficiary to pay. That will be black and white in the rules if it's the case.

If it was a defined contribution pension, there should be a pot to pay out.

But yes, where was the other 50% to go? Was it to a new partner and had he nominated her for 100% in the official paperwork? As I understand it, it would automatically go to a spouse if there was no nomination, but you can nominate someone else.

What was on his nomination form?

Thanks all, really helpful. I will do some more digging

When you say 50% of the pension, do you mean that he was receiving his pension? And 50% was the spouse/partner pension payable on death. Or was the pension not yet in payment to him? As the two situations are quite different. The beneficiary form is usually for the latter eg when there is a death in service lump sum

The addresses thing sounds mad- my DF died this year and had been in a care home for 18 months - of course at a separate address. (Pensions has gone through and my DM is the beneficiary)

Well it can be if the person has to be a dependent, but then this is his wife.

So, have had a chat with my mum.

Dad had been in receipt of his pension for some 15 years before he died and there was nobody else nominated on an EoW form or anything else. He was going by his pensions company literature (Railpen) that stated “in the event of your death, your spouse will receive 50% of your pension” and therefore when he got his diagnosis, believed that it would be a simple process for my mum to apply, when the time came. Prior to his passing away, and for the previous 15+ years, mum had been financially dependent on him, and the two of them had an informal (ie, no court settlement etc - they were very amicable and of course, never divorced) arrangement whereby dad was transferring approx. half of his Railpen to her bank account monthly.

He didnt nominate a beneficiary because the ts and cs were pretty clear, 50% goes to the spouse.

As far as i can tell Railpen are not acting in accordance with their ts and cs or my dads wishes. Just wondering what to do next? The company are awful, take weeks to get back and then only the briefest of replies

Shouldn’t it go to you then?
My ex husband (divorced) died this year, he wanted the pension benefits to go to me, left in a note at his death. Instead it’s going into trust for our children.

I would assume you would have to prove that despite them living in separate addresses she was financially dependent on him. If she has just applied for the money without explaining this I can see why they have declined as it would seem to them that whilst not divorced they were clearly separated. She has proof by way of bank records that he was transferring half the pension to her whilst alive.

This is my area of work. I administer workplace and defined benefit pension schemes.

An expression of wish is for a lump sum only. The trustees could take into account an email, but it doesn't sound like a lump sum is payable anyway. Unless he retired fairly recently (usually within 5 years).

A spouse's pension (usually 50% of the member's pension) will be payable according to the rules of the scheme.

OP, you need to ask them to send you a copy of the relevant clause in the scheme rules that states the spouse must be living at the same address to be eligible for a pension.

This is not an unusual condition, so if the administrators are telling you this, it sounds reasonable. But you can satisfy yourself by seeing it in black & white.

Yes this too.

Depending on what the scheme rules say about eligibility for a spouse's pension, you could argue financial dependency and prove this with bank statements.

Thankyou all, this has been incredibly helpful.

I think we need to see the small print!

OP, if you when you get the relevant clause in the scheme rules, feel free to DM me. I do this every day and also sit on the trustee side so see the decisions they have to make when it's not black and white.

That is a really kind offer @BonnesVacances@BonnesVacances

I have been trying to read the small print of my DB pension and ultimately it seems to be up to the trustees in this sort of situation.

I think the key for you will be to evidence that your mum was financially dependent on your Dad.

Try and get in touch with the pension advisory service. It's free and has professionals that volunteer their time to help people navigate things to do with pensions. They helped me a few years ago with a very different pension issue but were fabulous and resolved it for me, wrote letters to my former employer, chased them up etc.

I would be sending copies of hers and his bank statements demonstrating that he was supporting her financially even though they did not share an address.

And just say that is how they preferred to live, and manage their marriage.

I've never heard of that. If they didn't want to pay the spouse in this case (which I can maybe understand), why aren't they paying you and any siblings? Whilst they do get a say as to where it goes, I'm pretty sure they can't just keep the money. Who did you dad want to get the other half?

Oh hang on - had your dad been taking his pension?

Please ignore my stupid post - I've just realised I missed a whole chunk of thread 😳

A lot of times the treatment of the benefits is discretionary by the trustees. I think you need to demonstrate that your DM still had financial ties/dependency although they lived separately. That's likely to be the best way to have the decision altered.

I have seen an occasion when a person died and the payment was made to his current partner rather than his legal wife as it was shown that he was living with the new partner for 15 years and shared a child. He just hadn't bothered to get divorced and remarried.

I also think that for their own benefit, many of the posters on here really need to look at and understand how their workplace and/or private pensions work or they are in for a shock.

Most workplace pensions have a facility for a spouses/dependents pension of half their pension but a lot of it is down to trustee discretion. The rest of the money from the pot built up (if not used up) stays in the fund. It's a bit of a gamble, but in most cases you would need to live into your 90s to use up your "share" of the fund. Some schemes might have a clause where your estate gets a minimum of 5 years worth of pension payments, but in some cases, you could potentially get your pension and even if you died after a couple of years, the rest of the benefit is retained in the scheme. However the big advantage is obviously is that it's a guaranteed income for life.

If you have a private pension and buy an annuity, what happens when you die depends on the annuity you bought. You can build in a minimum term/spouses pension etc but all that affects the payment you receive. You are effectively gambling on how long you/your spouse might live.