The lump sum death grant is equal to three times assumed pensionable pay. If you are part-time, it is three times assumed pensionable part-time pay.
If you have other deferred or pensioner benefits, the death grant payable is the higher of either the active death grant or the sum of the deferred and pensioner death grants.
Will death benefits from the Scheme be subject to Inheritance Tax?
From 6 April 2027, unused pension funds and certain pension death benefits may be included when calculating the value of a deceased member’s estate for Inheritance Tax purposes. Whether any Inheritance Tax is payable will depend on the value of the estate and the individual circumstances of the beneficiaries.
Benefits paid to a surviving spouse or civil partner continue to be exempt from Inheritance Tax under the current legislation.
Are death-in-service benefits affected?
No. Death-in-service benefits payable from a registered pension scheme remain exempt from the Inheritance Tax changes taking effect from 6 April 2027.
Active members of the LGPS (NI) are therefore generally unaffected while they remain in pensionable employment.
Will NILGOSC be able to tell me whether Inheritance Tax will be payable?
No. NILGOSC cannot provide financial or tax advice and cannot determine whether Inheritance Tax will be payable in an individual case.
Members who are concerned about the impact of these changes on their estate planning arrangements should consider obtaining independent financial advice.
Expression of Wish Form
You can nominate who you would like your death grant and/or proceeds from your AVC fund to be paid to in the event of your death. This can be done via My NILGOSC Pension Online or you can complete and return an Expression of Wish Form LGS20 (502KB, PDF). All members are strongly advised to make a nomination and to ensure that it is kept up to date, especially if your circumstances change.
Under the regulations, NILGOSC retains absolute discretion on the allocation of any death grant. When exercising its discretion, NILGOSC will consider any nomination that you have made.