Death benefits

Death while still in service

If you die before Normal Retirement Age, while a contributing member of the Scheme the Scheme will pay the following amounts:-

A lump sum of four times your pensionable salary or four times your final salary, if greater, together with all your contributions with interest added;
Half your pension, paid to your dependants;
Allowances (pensions) for any children you have;
The value of any AVCs you paid.

How is the dependant's pension calculated and paid?

The dependant's pension is half the pension you would have received, if you had remained a member of the Scheme until age 65. We include all the pensionable service you would have completed up to that date, but calculate your Final Pensionable Salary at the date of death. When we calculate the pension you would have received, we base it on whether you were a lower level or higher level member when you died.

If you were married your spouse/civil partner will receive the dependant's pension, provided you were living together. If you had been married for less than one year and your spouse/civil partner is more than 20 years younger than you, the Trustee may reduce the dependant's pension.

If you were not living with your spouse or if you are not married or in a Civil Partnership, the dependant's pension may be paid to another person if they were financially dependent on you. The Trustee will carefully consider the circumstances of your partner at the time of your death to decide if he/she qualifies for the dependant's pension.

How are children's allowances calculated and paid?

If you leave one child, they receive 25% of the pension we would have paid to you, if you had remained a member of the Scheme until age 65. If you leave more than one child, the total paid to all of them will be half the pension you would have received, if you had remained a member of the scheme until age 65.

We calculate the pension you would have received at age 65 in the same way as applies to the dependant's pension.

Allowances are paid until the child reaches age 18, but the Trustee may continue the allowance until age 22, if the child is continuing in full-time education. The Trustee may further extend payment of the allowance to the child's 25th birthday if they are still undertaking appropriate full-time further education. In order to be eligible for the child allowance beyond age 18, the child must start their further education before they reach their 22nd birthday. Any payment made beyond the age of 23 will be deemed an unauthorised payment by the HMRC and will be taxed accordingly.

You can help the Trustee make its decision by completing a Beneficiary Form which you can get from your HR contact, Payroll Department or from the Kingfisher Pensions Department

Who is defined as a 'dependant'?

Under the Scheme Rules a dependant is defined as a member's widow, widower, civil partner or child or someone other than the above who is a the date of the member's death:

financially dependant on the member
in a financial relationship of mutual dependence with the member, or
dependant on the member because of physical or mental impairment.

Who receives the lump sum death benefit?

The Trustee decides who receives lump sum payments on death. This allows payment to be made quickly, without the need to wait for a Grant of Probate or Letters of Administration. Payment is made directly to the people chosen by the Trustee and, as the payment avoids your estate, it can be made free of inheritance tax.

The Trustee can choose from a wide range of potential recipients including your family and your dependants, anyone you have been in a long standing relationship with, anyone with an interest in your estate and anyone specifically nominated by you in writing.

You can help the Trustee make its decision by completing a Beneficiary Form, which you can get from your HR contact, Payroll Department or from the Kingfisher Pensions Department or download from our website. You are free to nominate anyone and can nominate more than one person.

The Trustee will take into account those you put on the Form, but are not legally bound to follow your wishes. This is because your circumstances may change after you complete the Form - for example, you could marry or divorce - and the Trustee will take into account any changes of this nature.

Please review your nominations from time to time and if your circumstances change, you should complete a new Beneficiary Form.

Death after leaving but before retirement

Your deferred pension is cancelled if you die before payment begins. However, a dependant's pension and/or child allowances may be paid.

If there are no dependants or children, a lump sum representing your contributions, plus interest, will be paid. Interest is based on inflation, up to a maximum of 5% p.a. and payment is made in the way described under "Who receives the lump sum death benefit?" above.

How is the dependant's pension calculated and paid?

The dependant's pension is half of your deferred pension, including the annual increases paid since you left the Scheme. If you were married your spouse will receive the dependant's pension, provided you were living together. If you had been married for less than one year and your spouse is more than 20 years younger than you, the Trustee may reduce the dependant's pension.

If you were not living with your spouse or if you are not married or in a civil partnership, the dependant's pension may be paid to another person if they were financially dependent on you. The Trustee will carefully consider the circumstances of your partner at the time of your death to decide if he/she qualifies for the dependant's pension.

How are children's allowances calculated and paid?

If you leave one child, they receive 25% of your deferred pension, including the annual increases paid since you left the Scheme. If you leave more than one child, the total paid to all of them will be half your deferred pension, including the annual increases paid since you left the Scheme. The Trustee will split the total allowance between your children.

Who is defined as a 'dependant'?

Under the Scheme Rules a dependant is defined as a member's widow, widower, civil partner or child or someone other than the above who is a the date of the member's death:

financially dependant on the member
in a financial relationship of mutual dependence with the member, or
dependant on the member because of physical or mental impairment.

Death after retirement

Your pension is only paid for your lifetime, so it ends when you die. However, a dependant's pension and/or child allowances may be paid.

If no dependant's pension or child allowance is payable, a lump sum may be paid if you die within 5 years of retirement. The lump sum is the balance of the payments that would have been made to you up to age 75, if you had been retired for five years. We take your annual pension on the day you retired, ignoring any amount you swapped for a lump sum, and multiply this by five. We then deduct the total of the pension instalments actually paid to you and the lump sum you received at retirement. The balance, if any, is paid as a lump sum and paid as described under "Who receives the lump sum death benefit?" above.

How is the dependant's pension calculated and paid?

The dependant's pension is half of your pension at retirement, including any amount you swapped for a lump sum, together with all the annual increases paid since retirement. If you were married your spouse will receive the dependant's pension, provided you were living together. If you had been married for less than one year and your spouse is more than 20 years younger than you, the Trustee may reduce the dependant's pension.

How are children's allowances calculated and paid?

If you leave one child, they receive 25% of your pension at retirement, including any amount you swapped for a lump sum, together with all the annual increases paid since retirement. If you leave more than one child, the total paid to all of them will be half your pension at retirement, including any amount you swapped for a lump sum, together with all the annual increases paid since retirement. The Trustee will split the total allowance between your children.

Who is defined as a 'dependant'?

Under the Scheme Rules a dependant is defined as a member's widow, widower, civil partner or child or someone other than the above who is a the date of the member's death:

financially dependant on the member
in a financial relationship of mutual dependence with the member, or
dependant on the member because of physical or mental impairment.

What if a pension or allowance is a small amount?

The Trustee has decided that all pensions that fall below the "triviality limit" - which is 1% of the Lifetime Allowance - will be commuted (i.e. exchanged) for a one off taxable lump sum in settlement of all future pension instalments. This means that if the dependant's pension, is less than the "triviality limit", the Trustee will automatically exchange this for a one off taxable lump sum.