Benefits for your Dependents

Generally, the following benefits may become payable on your death:

  • A lump sum (payable at the discretion of the Trustee).
  • A spouse’s pension that is a proportion of your pension.
  • A children’s pension.

These benefits depend on whether you are in active service, retirement, or have left the Plan at the date of your death and are based on your Reckonable service.

Lump sum

What happens if I die in service?

We will normally pay a lump sum of two times your Pensionable final earnings or, if greater, the sum available if you had retired due to ill health (see Leaving Service ). This lump sum will normally be tax-free. In the calculation of the lump sum available for ill health we will enhance your Reckonable service by the full amount of added years you have arranged to purchase.

If you are working part time, the lump sum is normally equal to two years’ actual part-time Pensionable final earnings.

There is also a refund of family benefit contributions (1.5% of your Pensionable earnings) if no spouse’s pension is payable on death.

What happens if I die after I leave the Plan?

If you leave the Plan and then die before drawing your pension, the lump-sum death benefit is equal to the preserved lump sum (see Section 6) at the date of your death.

There is also a refund of family benefit contributions (1.5% of your Pensionable earnings) if no spouse’s pension is payable on death.

Can I name someone to receive any lump sum when I die?

You can name the person or people you would wish to receive any lump sum payment due on your death. Payment of the lump sum to your nominee(s) will be subject to the discretion of the Trustee.

Spouse’s Pension

Does my husband, wife or Civil Partner get a pension?

A pension benefit is payable to your spouse when you die. Your spouse is the person you are legally married to, or who is your Civil Partner at the date of your death.

Your spouse’s pension will be 1/140 of your Pensionable final earnings per year of Reckonable service at the date of your death. The pension payable to your spouse will differ slightly depending on when you die:

  • If you die in service before Pension age (with two or more years’ Qualifying service) your Reckonable service for your spouse’s pension will be enhanced in the same way as if you retired on grounds of ill-health ( see Leaving Service ).
  • If you die while in receipt of an enhanced ill-health early retirement pension, an allowance will be made for the service enhancement in calculating the spouse’s pension.
  • If your pension is already in payment, the calculation will allow for any pension increases to the date of your death.
  • If you have preserved benefits, the calculation will allow for any revaluation of those benefits from your date of leaving the Plan to the date of your death ( see Leaving Service ).
  • If you have less than two years’ Qualifying service and die as a current member, no spouse’s pension will be paid.

Additional spouse’s pensions

Under certain circumstances the spouse’s pension will initially be paid at a higher rate as set out below.

If you have two years’ Qualifying service and die in service, a short term additional spouse’s pension is paid.  This increases the spouse’s pension described above for an initial period. The initial pension will be your rate of Pensionable final earnings for 91 days (or 182 days if you leave a spouse and one or more children in the care of your spouse).

If you are working part time, the pension will be based on your actual part-time Pensionable final earnings.

If you die while in receipt of your pension, a short term spouse’s pension is paid. This increases the spouse’s pension described above for an initial period. This pension will be the same as your pension at date of death and will be paid for 91 days (or 182 days if you leave a spouse and one or more children in the care of your spouse).

Example

James is a member of the Plan receiving benefits under the Former CPS Members’ Benefit Structure.  His Pension age is 60. He dies as a current member, aged 55, after 10 years’ service. James’s Pensionable final earnings are £20,000. James leaves a spouse, but has no children.

James’s Reckonable service will be enhanced by 10 years, to 20 years. ( see Leaving Service for details of the enhancement.)

James’s spouse’s short term spouse’s pension will be £20,000 a year. This will be paid for 91 days.

Thereafter James’s spouse will be paid a spouse’s pension of £2,857 a year

(1/140 x £20,000 x 20 years).

Will my spouse’s pension carry on if they remarry?

If your spouse gets married again or lives with someone as husband and wife or as a same sex partner (cohabitation), the pension will either stop or be reduced until that marriage or cohabitation comes to an end (except for certain members who joined the CPS prior to 1978). The pension may be continued at the Trustee’s discretion during the second marriage (or cohabitation) if there are compassionate reasons to do so.

Children’s pensions

Will my children get a pension?

We will pay a pension to a child of yours (and to any other child, as specified in the Glossary, who relies on you financially) when you die. We pay children’s pensions to children up to the age of 17 (or up to 23 if they are in full-time education).

This benefit is paid immediately after death, or, where an initial spouse’s pension is being paid at a higher rate, once payment of that short term spouse’s pension ceases.

We work out children’s pensions as a proportion of your pension and, for this purpose, your pension is calculated on the following bases:

  • If you die in service, the pension that would have been paid if you had been retired due to ill-health at the date of death (except that if you have less than 10 years’ Qualifying service, Reckonable service is increased to the greater of i) 10 years’ Total reckonable service less your accrued CPS Reckonable service or ii) Twice your Total Reckonable service less your accrued CPS Reckonable service, subject to this being less than the Reckonable service you would have had if you had remained in full-time service until five years after your Pension age);
  • If you die after retirement, or after being paid an ill-health pension, your actual pension, but if Qualifying service is less than 10 years, Reckonable service used in calculating this pension will be enhanced to 10 years less your accrued CPS Reckonable service or if less, what your Reckonable service would have been if you had remained in service until five years after your Pension age; or
  • If you die after leaving the Plan but before your pension comes into payment, your preserved pension increased between your date of leaving the Plan and the date of your death.

Eligibility for children’s pensions does not depend on the length of your Qualifying service.

If you have a permanently incapacitated child and have elected to pay additional contributions, an additional child’s pension will be payable on your death until the child ceases to be permanently incapacitated or marries. The additional member contribution required is 2% of Pensionable earnings for this benefit. If you are interested in this, please contact the Plan administrator (Tel: 0333 207 6523; Email: CombinedNuclearPensionPlan@equiniti.com).

Level of children’s pensions

The level of the pension we will pay depends on the number of children you leave and whether you leave them in the care of your spouse, or of another person and whether a spouse’s pension is paid. We will pay:

  • One quarter of your pension for each child, up to a maximum of one half of your pension, where a spouse’s pension is being paid, whether or not the spouse has care of all children; or
  • One quarter of your pension for each child, up to a maximum of one half of your pension, where no spouse’s pension is being paid and the spouse has care of all children; or
  • One third of your pension for each child, up to a maximum of two-thirds of your pension where no spouse’s pension is being paid and all children are in the care of another person.

If you leave more than two children in the care of more than one other person the maximum pension which can be paid is two-thirds of your pension which will be apportioned between those children in such shares as the Trustee determines.

For a permanently incapacitated child the pension will be 1/160th of  Pensionable final earnings for each year of Reckonable service for which you have paid the extra contributions of 2% of Pensionable earnings.

Will my spouse’s and any children’s pensions increase in payment?

We will increase these pensions every April in line with the rise in the Retail Prices Index (RPI), in the same way as we increase the pension payable to you from the Plan.

Will my benefits have a minimum benefit guarantee?

If you die after retirement a lump sum of five times your pension, less the pension and lump sum payments already received at the date of your death, will be paid.