Page 25 - Group Insurance and Retirement Benefit IC 83 E- Book

Non-relatives, such as a defendant who is not legally married to you, are the most likely
people to pay substantial amounts of inheritance tax. The trustees will want to satisfy

themselves that the liability for inheritance tax has been taken care of before they

pay out the full death benefit, as they could be held liable for payment of the tax
otherwise.

What are my options on leaving service?
Under the Pensions Act, your pension scheme trustees have an obligation to let you have

a detailed note of the full options available to you on leaving service. The following may

help you to understand what these options mean:

What are vested rights?

This is a term used to describe a right which a pension scheme member acquires to a
benefit on leaving service, which is provided for in the rules of the scheme. Many scheme

rules giving vested rights are now overridden by the provisions of the Pensions Act,
which confers rights to preserved benefits. The Pensions Act does not permit schemes to

give leaving-service rights which are less than those provided for under the Act.
However, it is possible for schemes to exceed these statutory preserved benefits. A

―vested rights‖ rule may apply automatically on leaving service, usually after a certain

minimum period, regardless of the circumstances in which you leave. Sometimes, vested
rights apply only if you leave through no fault of your own, such as through redundancy.

In practice, most vested rights rules have been superseded, because preservation under
the Act is compulsory after two years in the scheme.

What are preserved benefits?
Preserved benefits are benefits ―earned‖ during service as a member of a pension scheme.

The Pensions Act 1990 originally provided only for preservation of benefits earned after
the 1st January 1991, the date on which the Act came into operation. They were available

to those who left service after the 1st January 1993, and who had been at least five years

in the pension scheme, in any other scheme of the same employer or in any pension
scheme from which rights have been transferred to your present scheme. The Pensions

(Amendment) Act, 2002 extended preservation to all benefits, regardless of when they