Gone missing
01 April 2019
This article was featured in the April 2019 issue of the magazine.
Dave King, pensions technical consultant at Aries Insight, outlines the legal procedures
Where a pension scheme member has been missing for a number of years, at what stage might it be possible for the member to be presumed dead? Well, historically, this area has been a bit of a minefield. There has long been a common law provision that would allow a court to assume a person to be dead when there has been no evidence of his or her continued existence for seven years.
It has also been possible to make an application under the Non-Contentious Probate Rules 1987 [SI 1987/2024] for leave to swear to the death of a person. Under this approach, there is no need to wait for seven years; however, where such leave is granted, the court is not making any presumption of death but merely giving the applicant the opportunity to swear to the death as a pre-condition for obtaining a grant of probate.
Then there was section 19 of the Matrimonial Causes Act 1973 and section 37 of the Civil Partnership Act 2004, which allowed a court to dissolve a marriage or civil partnership on grounds that one of the parties is presumed to be dead.
Overall, then, this area had long been a hodgepodge of common law and statutory provisions with no single codified approach.
Fortunately, this changed for England and Wales from 1 October 2014 when the Presumption of Death Act 2013 (‘the Act’) came into force. This Act allows a missing person’s spouse, civil partner, parent, child or sibling (or any other party with a sufficient interest) to apply to the High Court to make a presumption of death order (PDO).
Such an application can be made where the missing person has not been known to be alive for a period of at least seven years, or earlier where there is strong evidence that the person has died. Guidance on the process for applying for a PDO is available here: https://bit.ly/2GSioJ6.
The effect of a PDO is explained in section 3 of the Act as follows:
(1) A declaration under this Act is conclusive of: (a) the missing person’s presumed death, and (b) the date and time of the death.
(2) A declaration under this Act is effective against all persons and for all purposes, including for the purposes of: (a) the acquisition of an interest in any property, and (b) the ending of a marriage or civil partnership to which the missing person is a party.
...to apply to the High Court to make a presumption of death order...
Where the Court makes a PDO, the registrar general will make an entry in the register of presumed deaths. A certified copy of an entry in the register is treated as evidence of the missing person’s death without any further proof being required. (See page 13 of the House of Commons Briefing Paper available here: https://bit.ly/2TrBNGA.)
At a practical level, then, if a pension arrangement is served with a certified copy of an entry in the register of presumed deaths, this must be treated in the same way as a more conventional death certificate and the pension arrangement would be expected to distribute any death benefits due.
There is, of course, the question of what happens if the missing individual is subsequently found to still be alive? In this situation, the court will revoke the PDO, but where would this leave a pension scheme that has already paid out potentially large lump sum death benefits?
Fortunately, section 14 of the Act allows any person who provides for the payment of a capital sum on a person’s death to require the recipient of that lump sum, before the lump sum is paid, to take out an insurance policy in respect of any claim which the payer may make in the event of a PDO being varied or revoked. This does not, however, apply where the lump sum is paid out in respect of an annuity or other periodical payment.
Whilst the Act considered above applies for England and Wales, similar provision is made for other UK jurisdictions in the Presumption of Death (Scotland) Act 1977 and the Presumption of Death Act (Northern Ireland) 2009.
Although ‘missing member’ cases may be rare, they can be difficult to deal with. Now that the Act is in force, however, there is a clear route by which the presumption of death can be established. Guidance on this area, designed to assist relatives of missing persons, is also available here: http://bit.ly/2T9h4It.
Aries Insight are not lawyers or financial advisers. The information above sets out its best understanding of the legislation and how it applies, but should not be taken as constituting legal or financial advice.