Lump sum nominations & pensions for dependants

online factsheet P13 version18

IntroductionFrom the moment you join, right up to the time you retire, and even beyond, you have valuable life cover as a member of the Local Government Pension Scheme (LGPS for short). This can include a one off lump sum payment, and also pensions for your loved ones.

So we have put this factsheet together to give you an introduction to these various benefits, and details of who we can pay them to.

And in the case of the lump sum life cover, there’s a form you can fill in if you like, to let us know your wishes. You don’t have to fill in the form, but if you do, it will give us a better understanding of your wishes if you die.

GREATER MANCHESTER PENSION FUND

MAR2017

Want to make a nomination?

Please read the important notes inside this factsheet

then fill in the form at the back.

Lump sum life cover

Making a nominationIt’s possible to make a lump sum nomination, by filling in the nomination form which is at the back of this factsheet.

You can nominate whoever you like - friends, family, partners, even an organisation such as your favourite charity. Someone you name is known as a beneficiary.

All we ask is that if you want to name more than one beneficiary, you spell out what share each should get (making sure the shares add up to 100%!)

If you prefer, you can ask us to pay the lump sum to your personal representatives, for them to pay out in line with the rest of your estate. There is a section on the form for this.

Do I need to make a nomination?No you don’t, but please think about it seriously, as it’s the best way of letting us know your wishes.

It’s easy to change your mindYou can change your mind at any time by filling in a new nomination form. This is something you should think about if your circumstances change, for example someone you’ve named dies first, or you get divorced. You can also cancel your nomination at any time simply by writing in, or using the contact us form on our website (www.gmpf.org.uk).

If you pay AVCsIf you are also paying AVCs for extra lump sum life cover through our in house arrangement, your nomination will cover this too. If you are paying AVCs to top up your own benefits, our policy is:

l For AVCs set up 1 April 2014 onwards: the cash value will normally be paid in line with your nomination too

l For AVCs set up before 1 April 2014: these are paid to your estate

Warning: if you have multiple memberships there may only be one lump sum life cover payment. Here are some examples...

You pay into the LGPS for 2 jobs, either with ourselves or a different local authority fund:

Two lump sums

You pay into LGPS with ourselves but also have deferred benefits with ourselves or any other LGPS fund:

One lump sum - whichever is greatest

You pay into LGPS with ourselves and are also drawing an LGPS pension:

One lump sum - whichever is greatest

The amount of lump sum life cover you have depends on the type of member you are and the benefits you hold when you die. And if you have multiple memberships, there may only be one lump sum. Please see below for more details:

We can’t normally pay a

lump sum if you are 75+ when you die.

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Current member - you are still paying into the schemeIf you die in service, and you are only a member of the LGPS with us, we will pay out a lump sum of three times your pay. This is actually your assumed pay, so if for example you’ve been on reduced pay on long term sick, assumed pay is the pay you would have normally been on.

Deferred member - you have left the scheme, but have benefits ‘on hold’As long as you only have deferred benefits with us, the lump sum will be:

l If you left before 1 April 2008: three times the value of your deferred pension.

l If you left 1 April 2008 onwards: five times the value your deferred pension

Suspended ill health member - you retired on ill health, but this has now been suspendedThis only applies for leavers after 1 April 2008, and the lump sum is five times the value your suspended pension less the pension and lump sum already drawn.

Retired member drawing a pension from usIf you only draw an LGPS pension from ourselves, the lump sum will be:

l If you left before 1 April 2008: five times the value of your yearly pension less the pension you have already drawn

l If you left between 1 April 2008 and 31 March 2014: ten times the value of your yearly pension less the pension you have already drawn

l If you left from 1 April 2014 onwards: ten times the value of your yearly pension less the pension you have already drawn and any lump sum taken by swapping career average pension for lump sum.

Under the Scheme rules the final decision will always rest with us. But we have agreed guidelines as to how we will use this discretion...

If you don’t nominateWe will look at your personal circumstances, such as whether you have an immediate family member (a spouse or partner with or without children) and whether you have children from a previous relationship. We must also take into account any claims for the lump sum from anyone appearing to us to have been one of your relatives, or dependent on you at any time. And having taken everything into account that is relevant, we then make our decision as to who should benefit from the lump sum. But as, for example, ex-partners and estranged relatives have the right to apply for payment, you may wish to make a nomination after all, so that we know your wishes.

If you do nominateWe will always give great weight to your nomination, and will generally follow it unless this isn’t possible, or we feel there are exceptional circumstances.

An example of when we can’t follow your nomination is if a beneficiary has died, or we can’t trace them within two years. Also we may choose not to follow your nomination if your circumstances have changed, for example you had nominated a spouse or partner, but you have now separated.

And there will always be a short delay to allow for any claims from family or dependants who wouldn’t benefit if we followed your nomination. But they would have to put forward a good case for us to pay them instead.

How to make a nomination

Fill in your details on the form.

Sign the form and get it witnessed by someone who is not a beneficiary, their husband, wife, civil partner, or cohabiting partner. The witness must be over 18.

There is space on the back, in case you want to add any extra information giving weight to your nomination. For example, you might be divorced from your spouse, but still want them to benefit. Or you might have deliberately nominated a charity, even though you have a spouse or partner.

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Check all your details, before returning your form to us.

We will treat your nomination confidentially, and it will be valid as soon as we receive it. We will add the details to your pension records (which we hold on computer) and return your original to you.

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Who will you pay the lump sum to?

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Getting it right first time...

l Use black ink & CAPITALS so your form is clear.

l If you make a mistake, don’t cross it out! Instead fill in a new form or we will reject it.

l If you are nominating a child, just put their own details, rather than parents, guardians, etc.

l You cannot name an alternative in case one of your beneficiaries dies

l If naming more than one beneficiary, please spell out the percentage share for each, making sure it adds up to 100%.

The lump sum is normally

free from inheritance tax

Pensions for dependantsNow let’s move on to look at pensions for dependants. These benefits are totally separate to the lump sum life cover - they are worked out in a different way, and can be paid to different people. With this type of benefit, we have no discretion - the scheme rules spell out who we should pay a pension to. This is either your spouse, eligible cohabiting partner, or your civil partner, plus any dependent children...

Spouse - this means someone you are married to.

Eligible cohabiting partner - this means someone you are living with - see later for terms & conditions.

Civil partnership - where two people of the same sex have registered their partnership through a civil ceremony.

Dependent children - normally under 18 - see later for terms & conditions.

A pension for your spouse, eligible cohabiting partner, or same sex civil partner...Working out the value of the pension for a dependant if you die in service is not straightforward. But to give you a rough idea, the pension for your spouse, civil partner or eligible cohabiting partner is 160th of your pay for the period from the date you joined right up to your normal pension age. In other words:

Years to normal pension age

Current payx ÷ 160

A pension for dependent childrenBy a dependent child, we mean your natural child, adopted child, or a step child or child you have accepted into your family. The child needs to be:

l Under 18,

l Or aged 18 or over, but is under 23 and is in full time education or vocational training, for example an apprenticeship

l Or aged 18 or over but is unable to engage in gainful employment* because of a disability. In the case of a child aged 23 or over, the disability is likely to be permanent and the child was dependent on the member at the date of death because of that disability.

Gainful employment means paid employment for not less than 30 hours in each week for a period of not less than 12 months.

If you die in service, again we base the value of your children’s pensions on the period from the date you joined right up to your normal pension age, and your current pay at the point you die. But this time we use one of the following fractions:

l One child: 320th.

l Two or more children: Equal share of pension based on160th

If we pay children’s pensions but no spouse or partner’s pensions:

l One child: 240th.

l Two or more children: Equal share of pension based on120th

For example, for one child, where there is also a spouse or partner’s pension it would be:

Years to normal pension age

Current payx ÷ 320

Please see important

notes on

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How much pension will my dependants get?

More about dependants’ pensionsNormal pension ageAs explained, in many cases benefit enhancements are based on the years you would have built up to your normal pension age. This is 65, or your State pension age if later.

Deferred membersIf you no longer pay into GMPF and have deferred benefits, the dependants’ pensions are only based on the actual time you had been in the scheme, with no enhancement.

TransfersDependants’ pensions generally include a value to reflect any transfers into the scheme which you have had.

Cohabiting partnersA cohabiting partner is only eligible for a pension if you were paying into the scheme on or after 1 April 2008, and we can normally only count membership from 6 April 1988, unless you have paid extra to make it count.

Once you have leftIf you get married, form a cohabiting partnership or form a same sex civil partnership after you leave then in most cases the pension for your other half will be based on your membership from 5 April 1988. But...

l Where a man marries a woman after he leaves, we will base the widow’s pension on his membership from 5 April 1978.

l If you left before 1 April 2014, and form a same sex civil partnership after this date, your civil partner’s pension will be based on all your membership.

Dependent childrenWe can only pay a pension to a natural child born within 12 months of your death.

An example of a child accepted into your family would be where you are bringing up your grandchild, but haven’t formally adopted him or her. A child you are sponsoring through a charity is not classed as dependent.

Where a child aged 18 or over is dependent because of a disability, an approved doctor may be asked to confirm that the child is permanently incapable of gainful employment.

What do my dependants need to do if I die?

We don’t currently need you to register your dependants’ details with us. But we will naturally need them to provide certificates or other documents at the point you die...

If you are married or in a in a same sex civil partnership we will need to see a copy of the marriage certificate/civil partnership certificate.

A cohabiting partner is only eligible for a pension if at the point you die, your partner has met ALL the following conditions for at least two years continuously:

l You and your partner have lived together as a couple in the same way as a married couple or civil partners would live together, and

l You and your partner were free to marry or form a civil partnership with each other, and

l Neither you or your partner have been married, in a civil partnership, or living with someone else in the last two years, and

l Your partner has depended on you financially (in other words, you had the highest income), or you have depended on each other financially (in other words you relied on your joint finances to support your standard of living).

Your partner will need to provide proof that you meet all these conditions, by showing documents such as utility bills or joint bank statements.

Dependent children - we will ask to see the full birth certificate showing parents, place of birth etc.

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Here are the ways you can find out more or get in touch with us. If you do contact us, please quote your National Insurance number.

Please remember to keep us up to date if you move house...

Visit our website to find out more or to contact us:

www.gmpf.org.uk

Or call our friendly helpline on:

0161 301 7000

Or call in at our offices:FGuardsman Tony Downes House 5 Manchester Road Droylsden M43 6SF

Can we help?

Lump sum nomination form

1. MEMBER DETAILS

Address:

Postcode:

Title Initials SurnameYour name: Employer or

former employer:

National Insuranceor Pension number:

(for example Bury MBC)

Your daytimephone number:

2. WHO YOU WOULD LIKE TO NOMINATE

Address:

Postcode:

Title: First name(s):

Beneficiary 1 Percentage share %

Surname:

Address:

Postcode:

Title: First name(s):

Beneficiary 2 Percentage share %

Surname:

I wish my personal representatives to pay out any lump sum in line with the rest of my estate

If you want your personal representatives to pay out any lump sum in line with the rest of your estate, tick here:OR... if you want to name individual beneficiaries yourself, please fill in the boxes below:

P13Version 17

Relationship to you:

3. DECLARATIONIf I die, I wish you to pay any lump sum to whoever I have named above. However I understand that for legal reasons the Fund has the discretion to decide who to pay. I also consent to you storing the information I have given.

Your signature:

4. WITNESSED BY (NOT SOMEONE YOU HAVE NOMINATED OR THEIR SPOUSE, CIVIL PARTNER OR COHABITING PARTNER)

Address:

Postcode:

Witness’s full name: Witness’s

signature:

Address:

Postcode:

Title: First name(s):

Beneficiary 3 Percentage share %

Surname:

Address:

Postcode:

Title: First name(s):

Beneficiary 4 Percentage share %

Surname:

Date witnessed:

Today’s Date:

P E N S I O N S O F F I C E S T A M P

Date of birth:

Relationship to you:Date of birth:DD MM YYYY DD MM YYYY

Relationship to you:Date of birth: Relationship to you:Date of birth:DD MM YYYY DD MM YYYY

DD MM YYYY

DD MM YYYY

Please return to:Greater Manchester Pension Fund Guardsman Tony Downes House 5 Manchester Rd, Droylsden, M43 6SF.

5. EXTRA INFORMATION (only fill in if you want to)