When you find out an active member has died, please tell us as soon as possible.
Fill in the Death of an active member on the employer portal within three days of the date of death.
When active members die in service we pay a lump sum of three times’ the assumed pensionable pay at the date of death. The member must be under age 75.
The annual rate of assumed pensionable pay is also used to calculate any survivor’s pensions. A member’s accrued pension at the date of death is recalculated using an accrual rate of 1/160th and is added to a sum equivalent to 1/160th of the member’s APP at the date of death for each year or part year between the date of the member’s death and the member’s normal pension age (NPA).
The annual rate of assumed pensionable pay is calculated using the average of the pensionable pay (excluding any lump sums) for the 12 weekly or 3 monthly complete pay periods prior to the date of death.
A monthly-paid member has received the following pensionable pay in the three complete months before the date of death.
- Month 1 – £1,400
- Month 2 – £2,500 including a £1,000 regular bonus and £100 overtime
- Month 3 – £1,400
The annual rate of APP is (£1,400 + £1,500 + £1,400 ÷ 3) x 12 = £17,200 Remove the bonus before averaging and grossing up the calculation or it will artificially inflate the APP figure.
Any regular lump sums which you determine there is a ‘reasonable expectation’ would have been paid to the member are added back into the annual rate of APP.
The calculation is (£1,400 + £1,500 + £1,400 / 3) x 12 = £17,200 + £1,000 = £18,200
Note – membership: the member doesn’t need two years’ qualifying membership at the date of death.
If they have a deferred benefit, or a pension in payment from a previous period of membership that ended after 31 March 2014, any lump sum death grant that we pay for those benefits will be on top of the lump sum death grant of three times their APP.
If a member has a deferred benefit or pension in payment from a previous period of membership of the scheme that ended before 1 April 2014, the lump sum death grant will be any lump sum death grant payable for those benefits, or the ‘death in service’ lump sum death grant of three times their APP, whichever is the biggest.
Note – AVCs: if a member is paying AVCs the value of the AVC fund is also payable, including any extra life cover.
