Page 21 - Group Insurance and Retirement Benefit IC 83 E- Book

Who gets my death-in-service benefits?

The rules of the majority of pension schemes specify that the lump sum death in service
benefits are payable to a broad category of ―dependants‖. These will normally include a

member‘s wife or husband and children under 18. Often, in addition, the category of
dependants will include those over 18 who are still receiving education or who are

mentally or physically handicapped, and any person who was ordinarily dependent on the
member for the necessaries of life. Remember, the definition of dependants can vary

considerably from scheme to scheme and you should check your scheme booklet or other

explanatory documents.

Discretionary Powers of Trustees

In most schemes, the trustees will have a fairly wide discretion to decide who gets these
benefits. In some schemes, apart from ―dependants‖ as outlined above, there might also

be a broader category of eligible beneficiaries whom the trustees can choose to pay. You
cannot direct the trustees in the way they exercise these discretionary powers (but see

next paragraph).

Nomination of Dependants

The trustees may give you the option of completing a form of nomination of dependants,

often known as a ―wishes letter‖ or ―expression of wishes‖. The purpose of this is to
specify your own wishes in the disposal of your death benefit. Such a letter or expression

of wishes cannot bind the trustees but they will normally try to give effect to your wishes.
They will not do so, however, where your wishes are in conflict with the obligations

imposed by law on trustees.

Spouses’ Pensions

If the dependants‘ pensions are expressed as ―spouses‘ pensions‖ in the scheme rules,
they can be paid only to the lawful spouse of the member.