From the date you join the Local Government Pension Scheme (LGPS), you get valuable life cover and financial protection for your family.
There are two types of benefits that we could pay if you die:
- Dependant’s pension. This is a regular payment to someone dependent on you at the time of your death. For example, a spouse, registered civil partner, or, subject to certain qualifying conditions, an eligible cohabiting partner. We may also pay children who are below a certain age or who meet other criteria.
- A lump sum death grant. This is a lump sum, usually paid to the person who you choose to nominate. You should let us know who you’d like to nominate by completing an expression of wish form, available in your My Pension account.
Spouse’s or civil partner’s pension
A spouse is someone who is married to you. By civil partner, we mean someone with whom you have registered your partnership through a civil ceremony.
You can find out how much we might pay to your spouse or partner on your benefit statement which is available by logging into your My Pension account. If you still pay into GMPF, you can use the pension calculator within My Pension to work these out too.
Co-habiting partner’s pension
A cohabiting partner is a partner you are living with, in the same way as you would if you were married or in a civil partnership. When you die, if all of the following conditions apply and have done for at least the last two years before your death, then we will pay your partner a pension:
- You paid into the LGPS on or after 1 April 2008.
- You and your partner lived together as if you were married or civil partners.
- You were both legally able to marry or form a civil partnership but chose not to.
- Neither of you has been living with someone else as if you were a married couple or civil partners.
- Either your cohabiting partner is and has been financially dependent on you, or you have depended on each other financially.
We will ask your partner for evidence that they meet these conditions at the time of your death. Therefore, you should keep copies of documents, preferably in both names and showing the same address, such as council tax bills, mortgage statements or a rental agreement, utility bills and bank statements showing contributions to the household.
We will usually pay a pension to a child until they reach age 18. If they are in full time education or vocational training, the pension could be paid until they finish their course or reach age 23, whichever is first.
If your child is over the age of 18 and unable to get a job because of a disability, then we may pay a pension to them too.
Any child we consider paying must be your natural child, adopted child, stepchild or child you have accepted into your family.
The amount your dependants receive is worked out using the value of your pension and when you were a contributing member of the LGPS. You can find out how these are calculated in the LGA full guide.
What happens to the extra contributions I have paid?
If you are paying or have paid extra contributions, these may count towards the benefits your dependant receives.
- If you started paying Additional Regular Contributions (ARCs) before 1 April 2014 and chose to pay for dependant's benefits: we will pay extra benefits to your spouse/partner and any children. If you are still paying ARCs when you die, we will treat your contract as having been paid in full.
- If you bought added years of membership before 1 April 2008: the extra years you bought may count towards your dependants’ benefits. If you are still paying for these when you die, we will treat your contract as having been paid in full. If your benefits are on hold or in payment, the period you bought will count as long as you are married, entered into a civil partnership or were cohabiting with your partner before you left. It will also count towards any children’s pensions.
- If you bought extra cohabiting partner benefits before 1 April 2014: An election to pay additional contributions to make membership before 6 April 1988 count towards the calculation of cohabiting partner's pension must have been made before 1 April 2014.
- If you are receiving a pension from an annuity purchased from GMPF with Additional Voluntary Contributions: the extra pension you bought will count unless you retired between 1 April 2008 and 31 March 2014 and chose not to provide for dependant's benefits.
There are two circumstances where extra contribution would not count towards your dependant’s pension:
- If you are paying, or have paid, Additional Pension Contributions (APCs) or Shared Cost Additional Pension Contributions (SCAPCs) to buy extra pension only.
- If you are paying or have paid Additional Regular Contributions (ARCs) but did not opt to pay for dependant's benefits when you took out your contract.
There is a lump sum death grant payable from the day you join Greater Manchester Pension Fund (GMPF) well into retirement.
How much might my death grant be?
If you are employed and paying into your GMPF pension when you die, the amount of death grant will be three times your annual pay.
You can find out how much your death grant might be by logging into your My Pension account and using the pension calculator or by viewing your most recent annual benefit statement.
Benefits on hold
If you have benefits on hold and left:
- before 1 April 2008: your death grant will be three times your annual pension that is on hold.
- on or after 1 April 2008: your death grant will be five times your annual pension that is on hold.
Receiving your pension
If we are already paying you your pension, we will pay a death grant if one of the following applies:
- You left before 1 April 2008 and you have been receiving your pension for less than five years – if so, the death grant will be equal to five times your annual pension less the pension we have already paid to you.
- You left between 1 April 2008 and 31 March 2014 and you have been receiving your pension for less than ten years – if so, the death grant will be equal to ten times the value of your annual pension less the pension already paid to you.
- You left on or after 1 April 2014 - the death grant will be equal to ten times the value of your annual pension less the pension already paid to you and any lump sum taken by giving up some of your career average based pension.
If you are still paying into your pension when you die and also have separate benefits on hold or in payment (either with GMPF or in another local government pension fund) then the death grant will be the greater of:
- The total of any death grants payable from the benefits on hold and/or pensions in payment; or
- Three times your annual pay at your date of death.
Who will you pay the lump sum death grant to?
GMPF decides who to pay once we know that a death grant is due. The death grant does not automatically form part of your estate and can be split to more than one person.
It’s important to complete an expression of wish form so we can look to pay the death grant in line with your wishes.
Even though we make the final decision about who will receive some or the entire death grant, we strongly encourage you to let us know and keep up to date, who you would like to receive the payment.
The death grant can be paid to someone other than a spouse or child; this could be the personal representative dealing with your estate, or any person who appears at any time to have been your relative or dependant. If the person or people you nominate are not your closest family, then please consider telling us why. This information might help us when making a decision.
Full details are in the death grant payment guidelines.
Is the lump sum death grant paid tax free?
Death grants are usually tax free. If you do not complete an expression of wish form or have any close family (such as a spouse, partner, children, parents or siblings), we may decide to pay it to your estate.
This may mean that it becomes subject to inheritance tax if your estate exceeds the inheritance tax limit. Paying to the estate can also be a long process if the personal representative has to obtain Grant of Probate or Letters of Administration. So, it’s best to make a nomination if you can.
The death grant will become taxable if we have not paid it within two years of being told about your death, and we can only then pay it to the personal representative.
What happens to my AVC if I die?
The value of your Additional Voluntary Contributions (AVC) are paid as a lump sum when you die.
GMPF must decide who to pay your AVC to. We can choose to pay it to the person or people on your expression of wish form, your personal representative or anyone we consider to be a relative or dependant.
If you left the scheme before 1 April 2014, the rules state that we can only pay the AVC lump sum to the personal representative dealing with your estate.
Extra life cover with Prudential when you die will be paid as a lump sum. GMPF will also decide who to pay that to.