Margaret and Michael Lyons: Married for 46 years
A widow who lost her husband in the spring struggled for nearly half a year to get pension firm Buck to begin payments that will be her main source of income.
Margaret Lyons, 70, has now inherited the substantial pension from her husband Michael, who built up his retirement fund over a 45-year career at Otis Elevator Company, which he joined at age 15.
Mrs Lyons reported her husband’s death at age 75 to Otis’s pension administrator, Buck, the day afterwards at the start of June.
But despite sending it all necessary paperwork, she was left unpaid for months.
She was wrongly told by Buck in July that her payments had ‘all been sorted’ and were just waiting to be signed off by a director.
And she then received a letter from the firm in September saying it would be ‘greatly appreciated’ if she could refrain from contacting its team for an update.
Bereaved people who are owed a pension following the death of their spouse are normally dealt with swiftly, and begin receiving payments within a couple of months – below, a financial expert explains how the process usually works.
A frustrated Mrs Lyons eventually contacted This is Money, saying she realised the coronavirus was causing considerable delays in processing paperwork, but apart from a one-month overpayment to her husband she had received no pension since his death.
She added that she was hesitant to touch that money until she knew where she stood.
‘Can you advise if you know of any way to hurry them up or, perhaps, this is normal and you think I am being unreasonable in expecting a quicker response,’ she asked us.
Have you faced a long delay to inherit a pension?
Buck said in its letter to Mrs Lyons that it has seen ‘an increase in requests in recent months’, which suggests a rise in deaths this year slowed its processing of payments.
If you have waited a long time to inherit a pension, write to firstname.lastname@example.org. Please put PENSION DELAY in the subject line.
Buck’s letter to Mrs Lyons in September apologised for the delay, but said it was ‘dealing with an increase in requests’ – presumably deaths, though this was not stated – before asking her not to contact staff while they worked to deal with outstanding queries.
She described this as ‘acknowledging my query but basically saying it is in a queue, don’t ring them, they are busy dealing with a backlog’.
The day after This is Money contacted Buck on her behalf, Mrs Lyons received a letter, with his pension scheme name and ‘Mr MH Lyons (Deceased)’ given as the reference, confirming she would start receiving her pension plus get a backpayment on 1 December.
Though it arrived the day after This is Money contacted Buck, the letter was dated nine days earlier.
Buck initially refused to comment to us about Mrs Lyons’ pension.
But after we raised the issue with Otis, Buck sent a statement saying: ‘We recognise we have fallen short of our usual standards and apologise to Mrs Lyons for the inconvenience and distress caused. We can confirm that all benefits have been settled.’
It also sent Mrs Lyons flowers and a personal note of apology. and a member of staff rang to reiterate this and to say she did not have to return the June overpayment to her husband.
A spokesperson for Otis, a global firm based in Connecticut in the US, said: ‘Our full sympathies are extended to Mrs Lyons for the loss of her husband.
‘Mr Lyons was a long serving and highly respected member of our team who retired several years ago.
Margaret says: ‘I have enough to get by. But there will be people who will be counting on this money, or who have debts’
‘We were not aware of the delay until recently. We are working with Buck to understand what has happened and to resolve the matter as quickly as possible.’
Mrs Lyons said her husband worked at Otis for his entire career, starting at age 15 as an apprentice, and he was a senior technical consultant who travelled the world solving engineering problems before he retired 15 years ago.
‘He was very well known. I have had emails from all over the the world. He was very well respected and a lot of people knew him.’
Mrs Lyons, from Kent, and married to Michael for 46 years, added regarding the delay to her pension payments: ‘I am not pleading poverty. I have enough to get by.
‘But there will be people who will be counting on this money, or who have debts. It doesn’t seem very good service. I was in administration in my working life.’
Without the pension she is inheriting, Mrs Lyons said: ‘I wouldn’t have much money to spend above my bills. I wouldn’t be claiming pension credit but I wouldn’t have much to live on.
‘I wouldn’t be able to go out to buy grandchildren presents without checking my bank account first.’
How long does it normally take to inherit a pension, and what should you do if there is a delay?
‘Dealing with finances while coping with a bereavement is a challenge in itself. Generally pension schemes will try and make things as smooth as possible,’ says Jon Greer, head of retirement policy at wealth management firm Quilter.
‘Normal practice is for such payments to be set up fairly quickly unless there is something more complex to the case.
‘For instance, where the deceased had an ex-spouse who may have an interest in some of the dependant pension.
‘The scheme should keep a beneficiary informed of what is going on and when they should expect to hear.
‘Given that may people will be relying on such payments and are more likely to be vulnerable after a loved one has passed some schemes may offer up front payments to help you for the immediate term.’
Greer says that if your partner was in a ‘defined benefit’ (also known as final salary) pension, the scheme rules will say what benefits are payable and who would be classed as dependants or beneficiaries.
The amount payable is usually based on a percentage of the holder’s pension entitlement.
When someone dies, you first need to contact the pension provider or employer, and Greer says the Money Advice Service has letter templates to help with this
He adds that if you can’t find any trace of the pension details, but think or know the deceased had one then you can use the Government’s free pensions tracing service
And if there is a long delay before you inherit a pension, you can make a formal complaint via a scheme’s ‘internal dispute resolution procedure’.