Members of a retirement fund should understand what becomes of their benefits after they die. Many funds don’t force you to retire therefore a lot of people never leave the fund. This could lead to possible issues, like payment delays, for beneficiaries and dependents.
If you are a member of a fund and have passed the retirement age then it is best to check the status of your investment. You could find that the fund is no longer appropriate for you. If you choose to remain then be sure to update all your beneficiary and dependents information.
Below is a to-do list that you can quickly run through to get a little peace of mind.
Evaluate all your investments and company performances once you pass retirement age. A retirement fund and pension-paying product have different rules for what happens after death therefore you need to understand the changes and how they affect you. If you are unsure then consult a financial advisor.
Update you information
A retirement fund is governed by a of board trustees. They are responsible for the allocation of benefits. Dependents can be anyone who is financially dependent on you; therefore updating any changes can help speed up the claims process. If you don’t have dependents then you should inform the fund in writing. The trustees are legally required to verify all submitted information and to do thorough research before making any payments.
Beneficiaries can be people, legal entities or trusts. You are required to supply their details in writing, which will alert the trustees that you want them to consider these beneficiaries for the allocation of benefits after death. Beneficiaries are only considered once dependents are dealt with.
A nomination does not guarantee a beneficiary an allocation of the benefit. Trustees are legally required to find all dependents before considering the beneficiaries. The nominations are a guideline and trustees use their discretion when distributing funds. The rules and regulations protect dependents and ensure that anyone financially dependent on you receives support.
Plan for the administration period
Allocation can often be a challenge, but trustees try to speed up the process. Claims can take a while depending on the complexity of the case and trustees can spend up to a year looking for dependents. Allocations can take even longer and it depends on the information you have provided.
Other factors can influence the process like police investigations into the death or missing dependents. In the event no dependents are found and no beneficiaries are named then a waiting period is required to find any untraced dependents.