It has been two years since we last wrote about nominations for Pathfinder and, since then there has been a ruling by the Pensions Ombudsman and a rule change.
In this article we examine the AFPS05 and AFPS15 provisions for nominating who should receive any pension lump sums due in the event of your death, and highlight the recent rule change and sound a note of caution.
AFPS 75 specifies exactly who is eligible to receive any death-in-service lump sum or any other pension lump sum due in the event of the member’s death – so no nomination is needed – indeed you are not able to – but that is not the case with AFPS 05 and AFPS 15. These newer schemes allow the member to nominate one or more people or organisations as recipients of any lump sums payable on the member’s death. This is not the same as nominating the recipient of the dependant’s pension itself – none of the schemes require you to do so that the scheme rules are specific about who is eligible.
Nominations to receive the lump sum must be made on an AFPS Form 2 and, if more than one person or organisation is nominated, how the sum is to be divided must be specified. Should the member die in service, the sums involved are significant. Whereas the AFPS 75 death-in-service lump sum is normally three times representative pay for the deceased’s rank, the AFPS 05 and AFPS 15 death in service lump sum is normally four times pensionable pay. I use the word ‘normally’ advisedly as where there are other pensions in payment or preserved/deferred benefits related to Armed Forces service, the sum can be less. Assuming no other pension benefits need to be taken into account, the AFPS 05 or AFPS 15 death-in-service lump sum for a corporal would be about £140,000 and– which, is serious sum of money in anyone’s terms.
Read the full article on page 6 of the March issue of Pathfinder
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