Leaflet - Survivor and death benefits

The Teachers’ Pension Scheme (TPS) is an important way to plan for you and your family’s future and there are benefits that may be paid by the TPS to your beneficiaries after your death.

Death Grants

• A death grant may be paid after the death of a teacher, former teacher or in some cases after the death of a pensioner.
• You may nominate someone to receive your death grant.
• You can register a nominee on the Teachers’ Pensions website using My Pension Online.
• The death grant may be paid to your nominee, spouse, registered civil partner, nominated partner or to your estate if you have none of these.
• If the death grant is more than £5,000 and has to be paid to your estate, it can only be paid after either a Grant of Probate or Letters of Administration have been seen.
• The Inheritance Tax position of the death grant is a matter for Her Majesty’s Revenue and Customs.

There is no minimum qualifying period for an ‘in service’ death grant. It is payable where:

• you die in pensionable employment;
• you die within 12 months of leaving pensionable employment due to ill-health; or
• you die while on unpaid maternity, paternity or adoption leave.

The death grant is calculated at three times your average salary and further information on this can be found in the fact sheet Average salary.

An ‘out of service’ death grant is payable where you die after leaving pensionable employment and is calculated as follows, with the higher amount being paid:

• the value of a lump sum based on your previous teaching service to the date of death and calculated at the rate of 3/80ths of your ‘average salary’ for each year of service, increased by the Retail Prices Index (RPI) to your date of death; or
• the value of the contributions you paid to the TPS plus interest at 3% per annum to the date of death.

If you die after retirement and the total amount of pension that you have received is less than five times your annual rate of pension, a supplementary death grant amounting to the difference may be paid.

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Dependants’ Pensions provided by the TPS

• If you are unmarried or are not a registered civil partner, you can nominate your partner to receive benefits after you die. Further information can be found in the fact sheet Partner benefits available on the website.

Financially dependent relatives

• If you are unmarried, are not a registered civil partner and have not nominated a partner, you may nominate a financially dependent close relative to receive a pension when you die.
• A close relative is one of the following, provided they are widowed or have never been married or in a civil partnership: a parent; a brother or sister; or a step-parent.
• The nomination will lapse if you marry, register a civil partnership, nominate a partner or your dependant marries or registers a civil partnership.
• For a nomination to be accepted, you and your nominee have to establish that your nominee is wholly or mainly financially dependent upon you.
• A financial dependency check will be undertaken when you die.
• A nomination can be submitted by completing the financial dependency form, which can be obtained from the Forms and Leaflets section or from your employer.

Short-term pensions – these are paid for the first three months after your death

• If you die in service or within a year of leaving because of ill health, but have not received ill-health benefits, a short-term pension of three months salary will be paid to your dependant/s.
• Your dependant/s should notify your employer about your death so that this process can commence.
• This pension is paid by your employer based on your final salary less any deductions for income tax.
• A short-term pension is not paid if you died more than one year after leaving pensionable service and have not retired.
• If you die after retirement, a short-term pension is only paid if a long-term dependants’ pension is due to be paid. It is paid for three months at the rate of your final pension.
• An equivalent short-term pension is payable for one or more eligible children, paid at the same time.
• If you do not have an adult dependant but have one or more eligible children, a short-term pension is paid for six months at the rate of your final salary or pension.
• If you are subject to a Pension Sharing Order, the short-term pension will be calculated on your reduced pension, but any child’s short-term pension will not be reduced.

Long-term pensions

• The payment of the long-term pension is dependent on your having at least two years service counting for survivor benefits.
• A long-term pension is paid immediately after the short-term pension stops.
• Long-term pensions are increased annually in line with the rise in the cost of living.
• The long-term pension is calculated at the rate of 1/160th of your average salary for each year of survivor benefits service.
• This pension is payable for life.
• If you are subject to a Pension Sharing Order, any adult’s pension will also be reduced, but children will receive an unreduced pension.

Children’s pensions

• Children are: your children born during your lifetime or within 12 months of your death or adopted children

To qualify children have to be:

• under 17 years of age; or
• if over 17, receiving full-time continuing education or training lasting at least two years without a break of more than one academic year and under age 23; or
• incapacitated and dependent on you when you die.

The rate paid is:

• half of the adult’s pension to one child;
• if there are two or more children, the adult pension is divided equally between each child;
• a higher rate of child’s pension is paid if there is no pension payable to an adult dependant;
• the payment of children’s pensions may be affected by any earnings they may have;
• children in receipt of a pension must inform TP of any changes in their personal circumstances such as taking up employment or marrying.

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Qualifying for and increasing long-term pension provision

All pensionable service from 1 April 1972 (for widow or dependant), 6 April 1988 (for widower or registered civil partner) or 1 January 2007 (for nominated unmarried partners) automatically counts for long-term pensions.

If you wish to increase the value of your long-term pension, you can purchase all or part of your past service. You can only make an election within:

• six months of returning to pensionable employment if you have not been employed for any continuous period of six months from 26 June 1973 (for widow’s), 1 October 1988 (for widower’s) or from 21 December 2005 (for registered civil partner’s);
• six months of your marriage or civil partnership registration;
• six months of returning to pensionable employment after getting married or registering a civil partnership;
• six months of the date of nomination of the partner or dependant.

How to apply to cover additional service

• You can apply by completing an application form available on the website or by completing a form, which you can get from your employer.

Method of payment to purchase additional service

• A one off payment or deductions from your salary.
• For an estimate of the costs involved, use the calculation package on the TP website.
• You should contact your tax office about tax relief on lump sum contributions.

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Actions to be taken after your death

When you die, the person handling your affairs must contact TP immediately to notify your death. TP will issue a Bereavement Pack that contains information and application forms to claim benefits from the TPS.

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Where there is any difference between the legislation governing the Teachers’ Pension Scheme and the information in this leaflet the legislation will apply.

For more information on this or any aspect of the TPS, you can Contact Us.