This page contains questions and answers about the Royal Mail Group Life Assurance Scheme. If you have futher questions, please contact pensions.helpline@royalmail.com, call 0114 241 4545 or write to: Leavers Team, Royal Mail HR Services, Second Floor, Pond Street, Sheffield, S98 6HR.
Will I be covered for a benefit under the Royal Mail Group Life Assurance Scheme?
You will be covered for a life assurance benefit under the Royal Mail Group Life Assurance Scheme (“the Group Life Assurance Scheme”) if:
You are under age 75;
You are in service with Royal Mail Group.
You are not a member of another Royal Mail Group pension arrangement.
In these Q&As, Royal Mail Group means Royal Mail, Parcelforce Worldwide, Royal Mail Courier Services, StoreFeeder and any other employer admitted to the Group Life Assurance Scheme.
If you are a member of another Royal Mail Group pension plan and therefore not covered under the Group Life Assurance Scheme, please consult the relevant section of the Pensions website for more information on the benefits your dependants would be entitled to, under the relevant Royal Mail Group pension plan of which you are a member, if you died.
This other Royal Mail Group pension plan could be the Royal Mail Pension Plan or the Royal Mail Defined Contribution Plan.
What is the life assurance cover under the Group Life Assurance Scheme?
If you are not an active member of a Royal Mail Group pension plan but are covered for life assurance under the Group Life Assurance Scheme, you will be entitled to a total lump sum death in service benefit of two times your annual basic pay. This will be comprised of any lump sum you may be entitled to from a Royal Mail Group pension plan, plus an amount from the Royal Mail Group Life Assurance Scheme to ensure your death in service benefit is two times basic pay.
Please note: If the total lump sum death in service benefits from your other Royal Mail Group pension plans are greater than two times your annual basic pay, there will be no additional payment made from the Royal Mail Group Life Assurance Scheme.
Will I have to attend a medical?
In some circumstances you may be required to have a medical before you will be covered. You will be told if this is necessary.
How is the life assurance benefit provided?
The benefit provided by the Group Life Assurance Scheme is insured through a life insurance policy, so will only be payable to the extent that the Trustees, who are responsible for the administration of the Group Life Assurance Scheme, have been able to obtain insurance cover for you. If the insurer restricts the amount payable on your death, your beneficiaries may receive less than the amount stated above.
On leaving service, or reaching age 75 if earlier, your cover would cease and if you wanted alternative cover, you would have to secure it privately and pay the cost yourself.
When did all this come into effect?
The Group Life Assurance Scheme started on 1 April 2008. The benefit is provided through a trust called the Royal Mail Group Life Assurance Scheme. Benefits are payable in accordance with the rules of that Scheme.
Why was this Group Life Assurance Scheme set up?
When the Royal Mail Pension Plan (RMPP) closed to new members from 31 March 2008, new life cover and pension arrangements were put in place for employees joining Royal Mail Group after that date. This is to ensure that Royal Mail Group continues to provide a competitive employment package.
Is there a dependant’s pension payable on my death through membership of the Group Life Assurance Scheme?
No. If though you are also in a Royal Mail Group Pension Plan, please consult the relevant section of the Pensions website for more information on the benefits your dependants would be entitled to under that Royal Mail Group pension plan if you died.
How much does life assurance cost me under the Group Life Assurance Scheme?
There is no cost to you. The costs of the providing life cover under the Group Life Assurance Scheme are paid entirely by Royal Mail Group.
How do I nominate who I want to receive the payment from the Group Life Assurance Scheme on my death?
The Trustees of the Group Life Assurance Scheme decide to whom to pay benefits on your death but will take your wishes into account.
You should complete an Expression of Wish Form, available from the Pensions Helpline or by clicking here.
Note: If you ring the Pensions Helpline, please ensure that you obtain an Expression of Wish Form for the Royal Mail Group Life Assurance Scheme, and not one for any other Royal Mail Group pension plan.
What happens if I don’t return the Expression of Wish Form?
If you die while in service, the Trustees of the Group Life Assurance Scheme will have to decide who is to receive the benefits without knowing your wishes. The Trustees will have to investigate your circumstances in order to decide how to exercise their discretion. The Trustees may take into consideration any Will you have made or evidence from your family and friends. The Trustees are more likely to exercise their discretion in a way you would prefer them to, if you have returned the Expression of Wish Form.
Who can I nominate on the Expression of Wish Form?
You can nominate your spouse (including a spouse of the same sex), civil partner, partner, boyfriend or girlfriend, children, brother or sister, parents, grandparents, other relatives, or anyone financially dependent upon you or interdependent with you.
You can name several persons to share the lump sum death in service benefit and there are spaces on the form for you to state what proportion you would like each person to receive. If you were to nominate a charity or other organisation (rather than a person), it is possible that the Trustees would not follow your nomination.
What happens if my circumstances change?
If your circumstances change (you get married for example) and you would like different persons to receive the lump sum benefit, you will need to complete and return a new Expression of Wish Form. You can obtain a new form by calling the pensions helpline on 0114 241 4545 or by clicking here.
Will my beneficiaries have to pay tax on the money they receive?
Your beneficiaries will not normally have to pay inheritance tax on the money they receive because it is paid from a discretionary trust. This means it will not be included in your estate for inheritance tax purposes.
There will be no additional income tax for your personal representatives to pay so long as all the value of all benefits from all registered schemes (including benefits payable on death) does not exceed the Lifetime Allowance (£1,055,000 for the 2019/20 tax year and increasing each year with the Consumer Prices Index).
This is the current position as at August 2019 but you should note that tax rules may of course change in future.
What cover do I get for ill health?
The Group Life Assurance Scheme does not provide any ill health benefits over and above the ill health benefits currently provided by Royal Mail Group.
What happens if I go on sick leave?
If you were eligible for cover immediately before you go on sick leave, you will still be covered for the death in service lump sum under the Group Life Assurance Scheme so long as you are still employed by Royal Mail Group.
If I am drawing my pension and still work for Royal Mail Group, am I entitled to this life assurance cover of two times basic pay?
If you are not an active member of a Royal Mail Group pension plan, and you are employed by Royal Mail Group (excluding casual employees) you will be classed as a member of the Group Life Assurance Scheme. As such, you will be entitled to a total lump sum death in service benefit of two times your annual basic pay. This will be comprised of any lump sum you may be entitled to from a Royal Mail Group pension plan, plus an amount from the Royal Mail Group Life Assurance Scheme to ensure your death in service benefit is two times your annual basic pay.
Please note: If the total lump sum death in service benefits from your other Royal Mail Group pension plans are greater than two times your annual basic pay, there will be no additional payment made from the Royal Mail Group Life Assurance Scheme.
Will this benefit ever be withdrawn?
Royal Mail Group reserves the right to amend or withdraw this benefit in future, for example, if the costs of paying the insurance for providing this benefit become too high.
What if I die with other Royal Mail Group pension benefits?
If you have preserved benefits from another Royal Mail Group pension arrangement, your lump sum death benefit may be offset against the other death benefits payable.