Question:
As a retired male, I received a once-off lump sum payment and receive a monthly pension. What will happen if I die? Detail all the options, please (re spouse, children).
Answer:
Miso, This depends on whether you monthly pension is paid out a so-called living annuity or out of a conventional annuity. With a living annuity, you must fill out a nomination form, listing your beneficiaries. In the event of your passing, your beneficiaries (ie your wife and children, if you list them) will receive whatever money is left in your living annuity. If your money is invested in a so-called conventional annuity, the pension payments stop on your passing unless you initially chose to receive a pension that includes a spousal benefit. In that case, your wife would continue to receive a pension (albeit at a lesser amount, say only 75% of the current pension). The pension payments would stop fully on her passing. You make this decision (on including a spousal benefit) upfront, when you retire, and once made, you cannot change it. You should check with your former employer, to see what type of pension you are receiving (ie from a living annuity or from a conventional annuity). Most likely, it will be from a conventional annuity, and you should then check whether it includes a spousal benefit or not.
