Pensions
The pension form that can override your will
Many schemes pay death benefits at the trustees' discretion, guided by a nomination form. A stale form is a common and expensive oversight.
Comparisons of pension beneficiary nominations usually pick a winner. This one picks the circumstances, which is more useful.
The difference in one place
- Pension death benefits often sit outside the estate and are not governed by a will.
- Nomination forms completed years ago frequently name former partners.
- Each scheme needs its own nomination, and old employers count.
Why the will does not control it
In many systems, pension death benefits are paid under scheme rules rather than forming part of the estate, which is often deliberate for tax reasons. Where trustees hold discretion, they decide who receives the money, using the member's nomination as the primary guide.
A carefully drafted will can therefore say one thing while the pension pays somebody else entirely. The arrangement differs by country and by scheme, so the first step is finding out how yours works.
Stale nominations are the common failure
The form is typically completed on joining a scheme, at a point when the member's circumstances are very different. Divorces, remarriages, births and deaths all change who should be named, and none of them prompt anyone to update the form.
On an ordinary week, a nomination naming a former partner is not automatically void, and trustees may take it into account. Reviewing it after any significant life change is a five-minute task with severe consequences if skipped.
Every scheme needs its own
Someone with five employments has potentially five schemes, each with its own nomination and its own rules. Updating the current employer's form while leaving four old ones untouched is the usual state of affairs.
Keeping a list of every scheme, with the date each nomination was last reviewed, makes this manageable. That list is also what a partner or executor would otherwise have to reconstruct from nothing.
Unmarried partners are most exposed
Where a scheme distinguishes between spouses and cohabiting partners, an unmarried partner may have no automatic entitlement at all. Some schemes require evidence of financial interdependence, and a nomination form is frequently the strongest evidence available. For unmarried couples with children or shared finances, completing and refreshing the form is not optional.
The rules on this vary sharply between countries and between schemes within a country.
Ongoing income versus a lump sum
Some schemes pay a continuing income to a spouse or dependants; others pay whatever remains as a lump sum, and some do both. The distinction matters enormously to a surviving household and is knowable in advance from the scheme documents.
Where a continuing income is provided, its definition of who qualifies is the part to read carefully. These provisions are also part of what is lost or changed when pensions are transferred, which is worth checking before consolidating.
Tell someone it exists
Death benefits are claimed, not delivered automatically, and a scheme cannot pay a family that does not know it is there. A single document listing every scheme, administrator and reference number is what makes the claim possible.
Keeping it with the will, and telling the executor where it is, closes the loop. This is the least technical part of the subject and the part most likely to go undone.
Side by side
| Consideration | What it means in practice |
|---|---|
| Why the will does not control it | Pension death benefits often sit outside the estate and are not governed by a will. |
| Stale nominations are the common failure | Nomination forms completed years ago frequently name former partners. |
| Every scheme needs its own | Each scheme needs its own nomination, and old employers count. |
The takeaway
Check the nomination on every scheme you have ever joined, including the ones you left.
Small and repeatable beats ambitious and abandoned, almost every time.
Questions readers ask
Does my will cover my pension?
Often not. In many systems death benefits are paid under scheme rules, sometimes at trustee discretion guided by your nomination form. Check how each of your schemes works.
How often should I update a nomination?
After any significant change — marriage, separation, a birth, a death — and otherwise as a periodic check. The form is easy to complete and easy to forget for a decade.
