Death in retirement

Your pension is guaranteed to be paid for at least five years. If you die within five years of retirement and under age 75, a lump sum equal to the unpaid balance of five years’ pension payments will be paid. If you die age 75 or over and your pension has not been paid for five years, your spouse will be paid the balance of your pension as extra pension.

The Trustees will decide who receives the lump sum so that it can be paid tax free. They will consider the wishes on your Expression of Wish Form but, for tax reasons, they cannot be bound by them.

Your spouse will receive a pension of 50% of your pension before any was exchanged for cash. A spouse’s pension will be reduced if he or she is more than 10 years younger than you.

The Trustees may decide that your partner or dependant (with whom you share living costs) may receive a pension equal to a spouse’s pension. If you have a partner or dependant, it is important you complete an Expression of Wish Form that reflects your current circumstances so that the Trustees know your wishes.

If you have registered a civil partnership on your death in retirement, your civil partner will receive any contracted-out benefits built up from April 1988 and all spouse’s pension benefits built up by you since 5 December 2005.

A pension will be paid equal to 25% of the prospective pension for each of your first two eligible children. If you have more than two eligible children, a total pension of 50% of the prospective pension will be paid, shared among all your children as the Trustees decide. Children’s pensions are paid up to age 18. If any children are in
full-time education, the pension may be paid up to age 23, at the discretion of the Trustees.

If no spouse’s pension is payable, each child’s pension will be increased to 37.5% of your pension at the date of death. If more than two children’s pensions are payable, a maximum of 75% of the pension at date of death would apply.

Example

You die three years after retiring, leaving a widow(er) and two children under age 18. Your pension was £5,000 a year at the date of your death (equivalent to, say, £6,000 a year if you had not exchanged part for cash). The following benefits would be payable:

You can, at retirement, choose to give up part of your pension to provide additional pension for a dependant when you die, if the RNLI agrees. This would be paid in addition to the spouse’s and children’s pensions. More information will be available before you retire.