A death grant is defined as a lump sum that is payable to the deceased member’s nominee(s), or any person appearing to the Administering Authority to have been a nominee or personal representative(s), or any person appearing to the authority to have been his relative or dependant at the time.
We advise all members of the scheme to nominate whom and how they wish their death grant to be paid upon their death. Although this expression is taken into consideration following a member’s death, the decision as to whom the death grant should be paid to be entirely at the discretion of the Administering Authority, to accommodate for any changes for any out of date nominations.
This can be completed by logging into your Member Self Service record and editing your nomination/nominees
The whole of the death grant can be paid to one person, or the payment can be split as the Administering Authority deems fit. The death grant is not necessarily paid to the estate of the deceased person, and in this way inheritance tax can be avoided.
If you pay Additional Voluntary Contributions (AVCs) arranged through the LGPS, the value of your AVC fund is also payable, as is any extra life cover.
I have other LGPS benefits other than Clwyd Pension Fund
If you are an active member of the LGPS after 01/04/2014 and die, the Clwyd Pension Fund shall check if any other LGPS fund across England and Wales are paying you a Death Grant for a previous Deferred or Pensioner record. If the total Death Grant calculated with your previous Deferred or Pensioner records is larger than the Active Death Grant payable by Clwyd Pension Fund, then Clwyd Pension Fund must pay the larger amount, but the Death Grants from your Deferred or Pensioner records would not be payable.
Please note that the highest death grant is only applied to those records where the member left post 31/03/14
Death in Service
If a member dies whilst actively contributing into the LGPS after 1st April 2014, the total death grant is calculated as the amount equal to three times the deceased’s assumed pensionable pay.
There is no minimum period of membership required, however, if a member has opted out they shall not be entitled to a death in service death grant, and shall be calculated as a deferred member instead if the member has met the vesting period.
Assumed Pensionable Pay
A member dies on 10th July 2017, the employer calculates the assumed pensionable pay by calculating the average of the three complete months' pensionable pay received before the pay period in which the pay is reduced.
April pensionable pay = £1,600
May pensionable pay = £1,600
June pensionable pay = £1,800(The member's pay increased from 1st June to £1,800 per due to an annual pay award.)
An average of these three months is taken
£1,600 + £1,600 + £1,800 = £5,000 divided by 3 = £1666.67 per month.
This monthly assumed pensionable pay figure (£1666.67) is multiplied by 12 providing the member with an annual assumed pensionable pay of £20,000.
Annual Assumed Pensionable Pay = 12 months x £1666.67 = £20,000.04
Death Grant Lump Sum
£20,000.04 x 3 = £60,000.12
Things to consider
If you have reduced your hours as a result of a condition or illness (in the opinion of the independent occupational health physician), which subsequently resulted in your death; the reduction in your hours is disregarded when calculating the pay used for the death grant
The LGPS also allows you to say who you would like any death grant to be paid to, by completing an Expression of Wish form, which is available from the Clwyd Pension Fund website. The Scheme’s administering authority, however, retains absolute discretion when deciding who to pay any death grant to.