Pensions Paid After Death of Annuitant

Overview

The following processes are recommended for processing on the system, depending on whether or not the pension ceases when the annuitant dies, or whether a portion of the pension continues to be paid to a spouse or a dependant child.

Portion of pension paid to spouse/dependant

In cases where a portion of the pension, or the full pension if the annuitant is the member and died within the guarantee period, continues to be paid to a spouse or dependant child,

-  Calculate the amount that can be recovered from the spouse’s or child dependant’s pension each month.

-  Reduce the spouse’s or child dependant’s pension by the amount to be recovered each month.

-  Create a new membership payment record for the reduced amount and update the payment review date with a date one month prior to the date on which the last adjusted value must apply.

-  On the payment review date, create a new membership payment record with the unadjusted amount.  Check if there have been any increases during the time that the reduced amount was being paid and adjust the record accordingly if necessary.

Pension ceases on death of annuitant

In cases where the annuitant is the member and there is no spouse or dependant child, or the annuitant is the spouse or dependant child and the pension therefore ceases when the annuitant dies,

-  Capture an end date equal to the last payment date on the membership payment detail record and capture a cessation reason of death.
Note:
Once the Home Affairs file is uploaded via the system, the batch job will put the date of death in the END DATE field and a cessation reason of death in the CESSATION REASON field on the JU4DC Payment Details screen. 

-  Capture a manual accounting activity journal for any overpaid amount recovered from the annuitant’s estate using the following accounting activity:

The income and tax values included on the IRP5 and tax report on the system are extracted from the accounting transactions and therefore any journals processed to reduce the gross pension amount paid will be taken into account.

Also refer to End Dating of Annuity Record under

Regular Payments

Payments

Calculation of Overpayments on Death of Annuitant

Stop payments

Where payment is made by a third party, e.g. MultiData, and notice of an annuitant’s death is received after the payment run has been authorized but before the payment date, the third party must be instructed to remove the payment instruction from the file.

For cases where the amount will be paid once the correct bank account details are known, a manual accounting activity journal will be processed using the following accounting activity:

When the correct bank account details are known, a manual accounting activity journal will be processed using the following accounting activity:

For cases where the amount will not be paid, a manual accounting activity journal should be processed using the following accounting activity:

This will result in the reversal of the expense for the month for which the payment was stopped.

For information on manual accounting transactions, refer to

Accounting

Transaction Capture

Manual Accounting Transactions