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Cascading residual wealth to loved ones and future generations is possible with a pension and can be very tax efficient. Making nominations is important to ensure your client’s wishes to leave a legacy are clear. Without a nomination, the benefit options on death are more limited.

The CRA offers full death benefit flexibility.

Who can receive benefits on a member’s death?

Lump sums:

  • Dependant
  • Any other beneficiary nominated by the member
  • Any other beneficiary chosen at the discretion of the scheme administrator

Beneficiary drawdown:

  • Dependant
  • Anyone nominated by the member on their expression of wish

The scheme administrator cannot use their discretion to give flexi-access to anyone else if there is a nomination on file or a dependant exists.

Case studies

Change in death benefit legislation


Important terminology

Term Description
Beneficiary A generic term that can mean dependant, nominee or successor.
Dependant Someone who is dependent on the member (i.e. spouse or child under 23).
Nominee Anyone who is nominated on the member’s expression of wish (i.e. non-dependent child, grandchild, friend, local landlord etc).
Successor Anyone who succeeds a dependant or nominee.


Death benefit taxation

Uncrystallised or crystallised Death before age 75  Death after age 75
 Lump Sum Death Benefit  Tax-free*  Tax at beneficiaries’ marginal rate of tax**
 Beneficiary Drawdown  Tax-free*  Tax at beneficiaries’ marginal rate of tax


* Subject to the Lifetime Allowance
** For a Trust (45%)/for a charity lump sum death benefit (conditions apply) tax-free


Need more information? Please contact your consultant or call our technical team on 02380 726 010 (between 8.00am and 5.00pm Monday – Friday).

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