None of us enjoy thinking about death, and certainly not our own, but it’s important to understand what could happen to your pension and who could benefit, after you’ve gone.
The death benefits that may be payable from your pension are considered separately to your will, and they depend on which type of Scheme and Section you belong to, the options you select, and whether you’re retired or still working when you die.
Here’s a useful guide below, but your Member Guide will have more specific details of your own death benefits. If you’re logged in to your myRPS account, you will find your Member Guide in your home page under ‘My library’.
If you’re retired, and you’re a DB member of the Railways Pension Scheme (RPS), your death benefits could include:
There may also be a lump sum pay-out to your beneficiaries. The exact amount payable would depend on the amount of benefit you have taken since your retirement. If you have been receiving your pension for five years or more it’s unlikely any lump sum will be paid.
To help speed up the process, it’s important that you complete a Nomination form to let the Trustee know who you'd like the lump sum to be paid to. This can be done quickly and easily by logging into your myRPS account and going to ‘My Nominations’ in the ‘My Pension’ section of your member home page. Otherwise, it could go to the wrong person, or the payment may be delayed which could result in tax being payable.
If you’re a retired IWDC member, then your death benefits will depend almost entirely on how you have taken your pension. For example:
For more information, you would need to speak to your chosen annuity or drawdown provider, as these benefits are not payable directly by IWDC.
If you’re an active, or preserved, defined benefit member and die whilst you’re still working, your pension could pay out a lump sum. If you’re younger than 75 when you die, this payment would be tax-free for your beneficiaries. Death benefits may also include a pension to either a spouse, civil partner or dependent child (as in paragraph 1 above) but this would be taxed at their marginal rate of income tax.
If you’re an active, or preserved, IWDC member, die before your 75th birthday whilst you’re still working, and haven’t started drawing your pension, it can be passed to your beneficiaries tax-free.
The Scheme administrator, Railpen, will need to be notified of your death.
For defined benefit members, this can be done by contacting Railpen directly via:
For IWDC members, this will be whichever provider you have chosen for your drawdown or annuity arrangement.
For security reasons, Railpen will need to confirm at least three of the following for the deceased:
Railpen will also need a copy of the death certificate to proceed.
In all scenarios, your beneficiaries have two years to claim a death lump sum, after which tax may be charged.
Please ensure your friends/family are aware of these requirements.
If you have further questions on death benefits, check your Member Guide. If you’re logged in to your myRPS account, you will find this in your home page under ‘My library’.
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