Types of death benefits payable

There are two types of scheme benefits payable on a member’s death:

1. •

   pension death benefits, and

2. •

   lump sum death benefits

Until 5 April 2015, under the pension death benefit rules of the Finance Act 2004 (FA 2004), s 167, a pension death benefit could only be paid to a dependant of a member if it was to be an authorised payment. The term ‘dependant’ is defined in FA 2004 Sch 28 Pt 2 para 15.

From 6 April 2015, a pension death benefit may be paid not only to a dependant of a deceased member but also to a nominee or successor and still qualify as an authorised payment. The term 'nominee' is defined in FA 2004 Sch 28 Pt 2 para 27A while the term 'successor' is defined in FA 2004 Sch 28 Pt 2 para 27F.

More specifically, the following pension death benefits may be payable:

1. •

   a dependant’s scheme pension—this is payable from both a defined benefits arrangement and a money