Dependants’ Benefits

The Pensions Ombudsman made some useful comments in a recent determination about the payment of death benefits and, in particular, how trustees should exercise their powers in relation to dependants’ benefits. This article looks at the implications of the Ombudsman’s views.

In 1996, a member nominated his sister to receive a lump sum death benefit in the event of his death. The member died in 2000 without having updated the nomination or leaving a will. His parents were his next of kin under the intestacy laws. The trustee decided to award the lump sum death benefit and a dependant’s pension to the member’s fiancée.

The decision to award the dependant’s pension was based on the belief that the fiancée fell within the scheme’s definition of "Dependant" as she had been unable to maintain the same standard as living that she had as enjoyed on a joint income with the member. The decision to pay the fiancée the lump sum death benefit was also based on the fact that she was a Dependant