5. Dependants and Ill-Health Pensions

5. Dependants and Ill-Health Pensions

Q5-1. Are the PPF rules about pensions for surviving spouses, partners and dependants the same as for the Plan?
Note: The information provided in response to this question is relevant and correct whilst the Plan remains in the PPF assessment period. If we are successful in securing benefits outside the PPF then some of the detail set out below may change. Any new arrangements will be covered in personalised letters and other materials which will be sent to each member.
PPF compensation of 50% of member’s pension is payable to surviving spouses, qualifying unmarried partners and civil partners following the death of a member upon production of the relevant evidence e.g. marriage/civil partnership certificate. In the case of unmarried partners, evidence will have to be provided of cohabitation and that they were financially dependent or interdependent with the Plan member to qualify for benefits.
In accordance with PPF rules, compensation will be paid to dependent children up to age 18 or age 23 if they are either in qualifying further education or are incapable of working by reason of a disability under the Disability Discrimination Act 1995. No compensation is payable beyond the age of 23.The amount of compensation depends on whether compensation is being paid to a surviving spouse or partner.If it is being paid, the amount of compensation will be:

  • One child – 25% of the member’s compensation
  • Two or more children – 50% of the member’s compensation, divided equally between the children

If no other compensation is being paid, the amount of compensation will be:

  • One child – 50% of the member’s compensation
  • Two or more children – 100% of the member’s compensation, divided equally between the children
Q5-2. I am aged over 65 and when I retired I seem to recall that my wife’s future pension was more than 50% of my own – if she survives me will she get more than 50% of my pension at that time?
Note: The information provided in response to this question is relevant and correct whilst the Plan remains in the PPF assessment period. If we are successful in securing benefits outside the PPF then some of the detail set out below may change. Any new arrangements will be covered in personalised letters and other materials which will be sent to each member.
No. You may recall that when you retired you had the option to take your full pension entitlement or a lump sum and a reduced pension entitlement. Under Plan Rules, a surviving partner or spouse would have been entitled to a maximum of 50% of your full pension even if you decided to take a lump sum. You may also have elected to take ‘early retirement’ which would have further reduced your initial pension without affecting your spouse/partner pension. This may mean that the illustrative partner/spouse pension appeared to be significantly greater than 50% of your initial pension.
In summary, whatever arrangement or entitlements you may have had under the Plan, PPF compensation for a future surviving partner or spouse will be precisely 50% of your pension at the time of your death.
Q5-3. What are the PPF rules about ill health pensions?
With effect from the beginning of the assessment (January 14, 2009) no new ill health pensions have been or will be considered/put into payment. Existing ill health pensions continue to be subject to periodic review in accordance with Plan rules.
Note: The information provided in response to this question is relevant and correct whilst the Plan remains in the PPF assessment period. If we are successful in securing benefits outside the PPF then some of the detail set out below may change. Any new arrangements will be covered in personalised letters and other materials which will be sent to each member.
Legislation changed in April 2009 meaning that during assessment it is now possible for a member who is terminally ill to apply to the PPF for a Terminal Illness Lump Sum. The fundamental requirement is that the member must have a progressive illness (with a life expectancy of less than six months) and must not yet be receiving pension benefits from the Plan. If you think that that you might qualify for such a payment then you should immediately contact Willis Towers Watson and they will be able to assist you with the application process. The foregoing will continue to be available if the Plan transfers to the PPF at the end of assessment.