The in-service death grant defined
The death grant is also known as the in-service or out-of-service death grant.
The in-service death grant is a payment made to your next of kin in the event of your death if you die while you are a serving teaching. If you are in the career average scheme, this is three times your annual rate of pensionable earnings. If you are part-time or work irregular hours, this will be calculated as if you work full-time. If you are in the final salary scheme, then you will receive three times the fulltime equivalent of your salary.
It is essential to be aware that if you have taken a lump sum and then returned for additional service after retirement, then your in-service death grant will be offset against the lump sum received at retirement.
The small print
There are other times when you can receive an in-service death grant, even if you are not in-service as such. These include:
- periods of family leave covered by a part-salary or statutory benefits, if this period of leave follows from a period of pensionable service
- periods of absence due to illness, as long as you are still receiving full or half pay
- you are an active member of the armed forces called up and have asked that this time be counted as pensionable service
- if you die within 12 months of pensionable service, if you left teaching due to incapacity and a retirement pension hasn’t become payable. If you are on phased retirement, this does not count.
For all other circumstances, your out-of-service death grant is payable. This is calculated as 2.25 times the value of the annual pension you would have been eligible to receive at the time of death.
An important message
The sums paid as a death grant are considerable, whether in or out of service. Therefore, it is vital that the Teachers’ Pension Scheme is clear on who is the nominated recipient of your death grant.
The content in this article was correct on 28th June 2019. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on pensions for teachers and non-teachers. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.