 |
Family Benefit Contributions | |||||||||
|
Benefits on death - making your wishes known | |||||||||
|
Lump sum payments - Election and Declaration under Rule 28A | |||||||||
|
Dependants’ pensions | |||||||||
|
Arrangements on Death | |||||||||
|
|
|||||||||
|
Notifying the Scheme if your circumstances change | |||||||||
|
Pension Payslips | |||||||||
|
More Information About the Scheme | |||||||||
|
State Pension Benefits | |||||||||
|
Inland Revenue Limits | |||||||||
|
Resolving Pension Problems | |||||||||
|
The payment of widows’ and widowers’ pensions and children’s allowances is dependent on the contributor having paid family benefit contributions. Generally, only the period for which family benefit contributions were paid counts as reckonable service for these benefits. The provisions for the payment of family benefit contributions have changed substantially since the Scheme was established. The key provisions are:
BCSSS members can complete an "election and declaration" under Rule 28A of the Scheme nominating the person or persons they would like to receive any cash sum payable on their death. Cash sums are payable in respect of members who die before their pension has come into payment or who die within the ‘guarantee period’ (five years for most members) after their pension starts. The ‘election’ gives the Trustees a discretionary power to pay any cash sum on death to a relative or dependant rather than to the deceased member’s estate. The ‘declaration’ tells the Trustees who the member would like to receive the cash. Whilst the Trustees are not bound by such declarations they will usually be able to follow the member’s wishes. Once made, the election is irrevocable, but the nomination can
be changed. If you have already made a ‘Rule 28A’ nomination
it is a good idea to think about whether it needs updating. If you
have not made a nomination, then you may like to think about doing
so. A newly completed nomination form will replace any previous
nomination. A Rule 28A form can be completed and downloaded from the Requests & Forms section of the website, but please remember that it should be sealed in an envelope and clearly marked with your name and Scheme number before being returned to the administration office. Please note, as the election envelope will not be opened until we are notified of your death:
If you are a former contributor who paid family benefit contributions a spouse’s pension will be paid as of right if on your death you leave a legal widow/er. If you were to die without leaving a widow/er but there was someone other than a child who was financially dependent on you at your date of death, the Trustees, at their discretion, may award a pension to that person. The pension will be the same amount as the widow/er’s pension. This discretion means the Trustees can recognise partners of either sex and dependent relatives providing they were financially dependent on you. The Trustees can review any discretionary award of pension they make under these arrangements in light of changes in the dependant’s circumstances. If you are not married and there is someone who you think might qualify for the payment of an adult dependant’s pension if you were to die, you can write to the administration office with information about the person concerned. This will be recorded on your personal BCSSS file and, in the event of your death, may help to substantiate a claim for payment.
The death of someone close to you is always a stressful time and it will be helpful if your next of kin knows what will happen to your BCSSS benefits in the event of your death. If you are a former contributor, then a widow/er or dependant’s pension may be payable and there may be an entitlement to children’s allowances. If you die within the first few years of your pension starting a lump sum may be payable. There is no further entitlement to benefit on the death of a beneficiary who is in receipt of a widow/er or dependant’s pension or child allowance. The most important first step when a beneficiary dies is for the Scheme’s administration office to be notified of the death as soon as is practical. This can be done in writing or by telephone. Administration office staff will need information about the deceased and about the next of kin. The information required is:
The Administration office staff will write to the next of kin, usually within a week. The Administration office has a duty to recover any overpayment of pension paid in respect of the period after the date of death. The circumstances of each case may vary, but if a widow/er or dependant’s pension is being claimed, the applicant will be asked to complete a claim form, and also to send the Death Certificate. If this has not previously been seen, a Marriage Certificate may also be requested. If an adult dependant’s pension is being claimed the claimant will be asked to provide evidence of financial dependency.
You may not assign your BCSSS benefits to another person or use them as security for a loan. If you become incapable of managing your own affairs, then a payee can be appointed to receive your pension on your behalf. Typically this would be a close relative or perhaps the manager of a residential home. The Courts can make certain orders against the Scheme to make a deduction of pension. These may be Attachment of Earnings Orders, Income Payment Orders and Orders to make payments to a former spouse as part of a divorce settlement. The Scheme is obliged to comply with these Orders.
Please write and let the BCSSS administration office know as soon as you can if you change address. This will make sure that the BCSSS can continue to keep in touch with you about the Scheme and about your benefits. You should also let the Scheme know if your marital status changes. If you are receiving your pension by credit transfer to your bank or building society account, please write and let the administration office know if your account details change. Forms for both address changes and bank account changes can be found in the Requests & Forms section of this website, please complete, print off and sign these before sending them to the administration office.
A payslip showing a breakdown of your BCSSS pension with tax deductions will be issued with each instalment of pension. The administration office administers the payment of certain other benefits, which are not Scheme benefits, on behalf of British Coal. If you are entitled to any such benefits they will be paid with your Scheme pension and included on the payslip. These benefits included payment from:
An explanatory leaflet on Scheme payslips can be found in the Scheme publications section of the website.
As well as this website there are Scheme publications and reports which will give you more information about the Scheme. The Trustee’s newsletter, Pensions News, is issued to beneficiaries twice a year and copies of the most recent newsletters can be found on the ‘Publications’ page of this website. A summary of the Scheme’s Annual Report and Accounts is included in the winter issue of the newsletter. The full Report and Accounts are available on request to the Scheme Secretary. Also available from the Secretary are copies of the Scheme and Rules and reports prepared by the Scheme Actuary on each valuation of the Scheme. Recent contributors to the Scheme were contracted out of the State Earnings Related Pension Scheme (SERPS). SERPS started in April 1978 so if you contributed to the BCSSS after this date, you paid lower "contracted-out" rate of National Insurance Contributions. You will not have built up any entitlement to a SERPS pension during your period of contributory membership of the BCSSS. The pension due from contracted out schemes must not be less than a specified minimum amount roughly equal to the foregone SERPS pension, known as the Guaranteed Minimum Pension (GMP). Most members will have pension entitlements from the BCSSS well in excess of the GMP. There are special arrangements for RPI increases on GMP from State Pension Age and for widows’ and widowers’ pensions. These are explained in the section about pensions increases. There has been a change to the contracting out legislation which means that members of contracted out schemes no longer accrue a GMP for contributory service after 6 April 1997. Benefits arising from service before this date are not affected and so the change will only apply to those BCSSS members who were contributing to the Scheme after April 1997. Members who were contributors between April 1961 and April 1975 were contracted out of the State Graduated Pension Scheme. The concept of contracting out of the graduated scheme was essentially the same as for contracting out of SERPS. The Scheme must pay benefits, known as Equivalent Pension Benefits, at least equal to those that would have been earned in the Graduated Scheme. Generally, this element of pension forms a very small proportion of a member’s BCSSS entitlement. Membership of the BCSSS does not affect entitlement to the basic State pension. Like most occupational pension schemes, the BCSSS was designed to meet the Inland Revenue requirements for tax approval. This means that contributions paid by members were not counted as taxable earnings. Investment returns are not subject to Income Tax or Capital Gains Tax and cash sums on retirement or death are payable free of tax. Payments of pensions maybe subject to income tax depending on your personal tax circumstances. Accordingly, the BCSSS must be administered in accordance with the requirements of the Inland Revenue, including prescribed limits on the maximum benefits that can be provided. In principle, the limits cap the proportion of earnings that can be paid as pension by reference to years of service with the employer operating the pension scheme. It may also be necessary to take into account any benefits earned in a previous employer’s scheme, whether retained in that scheme or transferred in to the BCSSS. The requirements have changed over time which means that members whose pension started some years ago will be subject to a different limits calculation from members whose pensions started more recently. Also, there are different provisions for members who leave employment at normal pensionable age, earlier than normal pensionable age, or have to retire through ill health. The maximum pension that can be paid to dependants is limited to a proportion of the maximum pension that can be paid to former contributors. Retirement lump sums have to be converted to a pension equivalent for Revenue limits purposes. The practical effect of this is that the pension in payment from the BCSSS must not exceed the Revenue maximum pension calculated at the date of leaving service plus RPI increases for each year since that date. The payment of benefit improvements from successive surpluses has meant that some members have pensions that are equal to their Revenue maximum and they will not be able to fully receive any future Bonus Augmentations. An explanatory leaflet on Inland Revenue Limits can be found in the Scheme publications section of the website. About 8,000 pensioners were unable to receive the full 11% bonus augmentation paid from April 2001 because the total pension the Scheme could pay was capped by their Inland Revenue limit. However, in accordance with Revenue rules, the limit for all pensioners can be increased by 3% each year. Since this was more than the 2002 Scheme pension increase this meant that these pensioners gained some Inland Revenue limits ‘headroom’. The Trustees agreed that capped bonuses should be ‘topped up’ with effect from April 2002 to the member’s new Inland Revenue limit, or if they had sufficient headroom to the full 11% bonus. It is expected that it will be possible to repeat the exercise in future years to take account of each year’s increase in Revenue limits until all pensioners are receiving the full 11% bonus. Ultimately, if the Scheme is able to continue awarding additional Bonus Augmentations, many more pensioners will be capped by Inland Revenue limits. The Trustees, therefore, have considered what arrangements could be made to ensure that all members can continue to benefit from future surpluses. This could be achieved by transferring a part of any future surplus into another fund from which bonuses could be paid to members at Revenue limits. This is not the ideal solution, as it would involve establishing a separate fund that would not be tax approved and tax would therefore have to be paid on investment income and capital gains. Work on the feasibility of the option is continuing. Fortunately there are relatively few occasions on which ‘disputes’ arise between members and the officers of the Scheme and its Trustees. Problems or complaints can usually be resolved when they first arise with the Scheme’s administration office or with the Scheme’s secretariat staff at Coal Pension Trustees Services Ltd. If you have a problem that you have not been able to resolve to your satisfaction, you can make a formal complaint using the Scheme’s Internal Dispute Resolution procedure. In the first instance the Chief Executive or Benefits Manager at Coal Pension Trustees Services Ltd will deal with the complaint on the Trustees’ behalf and will let you have a decision on your complaint usually within two weeks, although complex issues may take a little longer. If you are not satisfied with the decision at this stage you can ask for your complaint to be referred to a second stage where it will be considered by the Trustees. The Trustees will review your complaint; they may ratify the decision taken at the first stage or they may take a different view. The Trustees will usually let you have their decision within two months of your appeal. Further details of the dispute resolution procedure and copies of the forms can be found under the Requests & Forms page of this website. |
|||||||||
|
||||||||||
