
What happens if you die whilst employed by IBM?

It’s a sensitive subject, but you can never be too prepared for what life might throw at you. So it’s important to understand the options for your beneficiaries.
Nominating beneficiaries
A key part of your retirement planning should be to make sure we have an up-to-date Nomination of beneficiary form, you can do that by simply logging in to Manage Your Account and click on Nominate Beneficiaries. This will make it clear who you’d like the remainder of your savings to go to if you haven’t yet taken your money. However, the Trustees have discretion as to who receives the money but will take your wishes into account. The Trustees have a sub-committee of the main Trustee Board which is called the Benefit Allocation Committee (BAC) that is responsible for making these discretionary decisions.
You should keep your nominations up to date via Manage Your Account to ensure your wishes are known to the Trustees.
The following benefits may be payable:
Group Life Assurance – The core level is two times your Pre You* salary (restricted to the M and I Plan Cap). If you have chosen a further two times as part of your annual You*, this higher amount will be payable.
Additional Lump Sum - A cash lump sum equal to your ASC/AVC fund will also be payable, where applicable.
Spouse/Civil partner’s pension – Your spouse/civil partner maybe eligible to receive a pension. This is calculated as a percentage of pensionable salary for all complete years and months of your pensionable service and prospective service to your normal retirement age.
Dependant(s) pension – If there is no spouse’s pension to be paid, the Trustee may, at its discretion, pay a pension to your dependant, for example a partner, if they meet the HMRC definition of a financial dependant. The amount of dependant’s pension payable would be decided by the Trustee and would be no greater than the spouse’s pension.
Child’s pension – Your children may also be eligible for a pension. The child’s pension is one third of the amount of the spouse’s and can be paid to a maximum of three of your children. If there is no pension payable to a spouse or dependant, any children’s pensions will be doubled.
What happens to my remaining pension pot if I die?
Once you’ve started to take your savings, what your loved ones may receive if you die depends on the option you chose at the point you accessed your money and the exact options available will be determined by the terms of your plan.
If you die before age 75: the value of any remaining money in your pension pot can be taken by your nominated beneficiary, in most cases as a tax-free single cash lump sum, subject to any allowances, or through flexi-access drawdown. However the exact options available will be determined by the terms of your scheme or policy.
If you die after age 75: the value of any remaining money in your pension pot can be taken by any nominated beneficiary in most cases as a single cash lump sum subject to the beneficiary’s marginal rate of income tax.
Alternatively, subject to the rules of your scheme or policy, any nominated beneficiary may be able to take an income through flexi-access drawdown, subject to their own marginal rate of income tax. If the beneficiary is your spouse, registered civil partner or another dependant they will also have the option of using the remaining money in your pension pot to buy an annuity subject to their marginal rate of tax.
The Trustees have discretion as to who receives the money but they will take your wishes into account.
If you die after leaving the Plan - If you're an M Plan member, you would receive a refund of the value of your pension pot (subject to BAC approval).
If you’ve chosen to take your pension pot as cash:
If you’ve taken your entire pension pot as cash, then all your benefits will have been paid from the scheme already. Your loved ones won’t receive anything more from the plan.
If you only want to take some cash from the Plan you'll need to transfer out to another provider, the benefits paid out with the money you've left in your pension pot would be dependent on the rules of the scheme you've transferred to.
If you’ve chosen a flexible retirement income:
Your chosen beneficiaries may be entitled to the savings left in your pension pot. They may have options as to how they are able to take the money, depending on the terms of the plan.
To take flexible retirement income you'll have to transfer into the Legal & General Mastertrust PAS . The Legal & General Mastertrust Trustees will have discretion on who receives the money but they will take your wishes into account.
If you’ve chosen to buy an annuity:
Annuities can continue to be paid as income after you die to your spouse, registered civil partner or financial dependants. However, this is determined by the type of annuity you purchased and the options you chose at the time.
Please note that in some cases tax may be payable. See our Tax Year Rates and Allowances 2024/2025 for further information.
For more general information visit What happens to my pension when I die? | MoneyHelper | MoneyHelper