The 1992 Scheme Regulations provide for a return of the firefighter's aggregate pension contributions on death, less any payments made or due to the officer on account of his or her pension and the capitalised value of any pension or allowance granted in respect of the officer's death.
This guidance relates to the determination of the capitalised value of the long-term survivor's pension. Any short-term increase in the level of survivor's pension must be taken into account in addition to the capitalised value of the long-term pension.
There is no such provision in the New Firefighters' Pension Scheme (Wales) (the 2007 Scheme).
Please note that the factors in this note should be applied to total pension, including any accrued Guaranteed Minimum Pension (GMP).
Cases where the surviving spouse or partner has no GMP entitlement, or has a GMP entitlement and the deceased member reached State Pension age on or after 6 April 2016
The capitalised value of the survivor's pension can be determined in cases where:
- the surviving spouse or partner is not entitled to any GMP and will not be entitled to any GMP in the future; or
the surviving spouse or partner is entitled to payment of GMP, or will be entitled to payment of GMP in the future, and the deceased member's State Pension age is on or after 6 April 2016
In those cases, the capitalised value can be calculated as follows:
Capitalised value = WPEN x Fwpen
where
WPEN is the annual pension in payment to a dependant
Fwpen is the factor for pension
Factors for this calculation should be taken from Table 2.
A death gratuity will not be payable if the capitalised value of the survivor's pension plus the value of other benefits paid to the member or surviving partner as described in the relevant regulations exceed the member's aggregate contributions.
Cases where there the surviving spouse or partner has a GMP entitlement and the deceased member reached State Pension age before 6 April 2016
For cases where the surviving spouse or partner is entitled to a GMP, and the deceased member reached their State Pension age before 6 April 2016, a simple rule of thumb can be used to determine whether more detailed consideration is required.
The rule of thumb is that, for individuals below age 75, the capitalised value of the pension will always exceed the pension in payment multiplied by the Rule of Thumb Capitalisation Factor (RTCF), which can be found in Table 3. Therefore, where the surviving spouse or partner's pension in payment multiplied by RTCF exceeds the member's aggregate pension contributions, it is safe to conclude that the capitalised value of the survivor's pension exceeds the member's aggregate contributions.
If the rule of thumb is not satisfied, or the member is over age 74, a bespoke calculation, not covered by this guidance, is required.
The rule of thumb factor is based on a factor for a non-increasing pension paid from age 74.
Please note that administrators are responsible for ensuring that payment of the death gratuity is compliant with relevant pensions taxation legislation, and administrators should seek further advice as necessary.
