Archived decisions
HAMPSHIRE COUNTY COUNCIL
Decision Report
Decision Maker: |
Pension Fund Panel | ||||||
Date of Decision: |
21 July 2009 | ||||||
Decision Title: |
Nomination for payment of death grant | ||||||
Decision Reference: |
843 | ||||||
Report From: |
County Treasurer | ||||||
Contact name: |
Nick Weaver, Pensions Services |
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Tel: |
01962 847587 |
Email: |
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1. Executive summary
1.1. The purpose of this paper is to inform the Pension Fund Panel of an extension to the facility for members to nominate who receives any lump sum payable on their death.
1.2. Local Government Pension Scheme (LGPS) regulations permit all members to nominate one or more individuals or organisations to receive any lump sum payable on their death. The Hampshire Pension Fund has until now only extended this option to active members of the scheme. Nominations cease when the member leaves or retires.
1.3. The facility to nominate has been extended with effect from 1 April 2009 to include deferred and pensioner members. There is no additional cost to the Fund for doing so.
2. Contextual information
2.1. A lump sum death grant is payable on the death of an active or deferred member or on the death of a pensioner (depending on date of retirement).
2.2. Active members can express a wish for the death grant to be paid to one or more individuals or organisations. If no nomination is made, the death grant is paid to the deceased's estate.
2.3. The main advantage for members to express a wish is that the payment can be made directly to their nominee and does not count for inheritance tax purposes.
2.4. For these tax advantages to apply, the administering authority must retain absolute discretion as to the distribution of the death grant. In practice the majority of payments are made according to the nomination but the administering authority is not legally bound by the member's wishes.
3. Extension of the facility to nominate
3.1. Previously only active members were able to make a nomination for the receipt of a death grant. This nomination ceased when they left the scheme or retired. Death grants for deferred and pensioner members were always paid to the estate of the deceased.
3.2. The value of death grants to all members has increased under the new scheme, as shown in the table below.
Member |
Death grant payable under old regulations |
Death grant payable under new regulations |
Active |
2 x actual salary |
3 x actual salary |
Deferred |
3 x annual pension |
5 x annual pension |
Pensioner |
5 x annual pension less pension already paid |
10 x annual pension less pension already paid |
This increases the relevance of nomination to pensioner and deferred members as more people will be affected by inheritance tax thresholds.
3.3. Other authorities have extended the option to nominate to cover all members of the scheme. Nominations remain valid unless they are changed, revoked or the nominee dies.
3.4. The Hampshire Pension Fund retains absolute discretion over payment of the death grant but the facility to nominate has been extended to include deferred and pensioner members with effect from 1 April 2009. There is no cost to the Fund for extending the option to nominate to all members.
4. Communication to members
4.1. All members now need to be notified of this extension to nominations.
4.2. It is proposed to include information on this change in the active and deferred member 2009 benefit statements. A letter to relevant pensioner members (ie those who would be entitled to a death grant) can be included with the fund leaflet in October.
5. Recommendation
5.1. That the facility to nominate who should receive a death grant be extended to deferred and pensioner members of the Fund from 1 April 2009.
CORPORATE OR LEGAL INFORMATION:
Links to the Corporate Strategy
Hampshire safer and more secure for all: |
yes/no |
Corporate Business plan link number (if appropriate): | |
Maximising well-being: |
yes/no |
Corporate Business plan link number (if appropriate): | |
Enhancing our quality of place: |
yes/no |
Corporate Business plan link number (if appropriate): | |
OR | |
This proposal does not link to the Corporate Strategy but, nevertheless, requires a decision because the arrangements for nominations for death grants need to be agreed. | |
Other Significant Links
Links to previous Member decisions: |
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Direct links to specific legislation or Government Directives |
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Section 100 D - Local Government Act 1972 - background documents | |
The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report. (NB: the list excludes published works and any documents which disclose exempt or confidential information as defined in the Act.) | |
Document |
Location |
IMPACT ASSESSMENTS:
1. Equalities Impact Assessment:
1.1. Equality objectives are not considered to be adversely affected by the proposals in this report.
2. Impact on Crime and Disorder:
2.1. The proposals in this report are not considered to have any direct impact on the prevention of crime.
3. Climate Change:
a) How does what is being proposed impact on our carbon footprint / energy consumption?
No specific impact.
b) How does what is being proposed consider the need to adapt to climate change, and be resilient to its longer term impacts?
No specific impact.