The death of an employee is always untimely whether it is anticipated or unexpected, and needs to be handled with tact, discretion and sincerity, which will be easier to achieve if eventualities are considered and planned for in advance, with alternative tactics (and their results) considered and determined when there is no urgency.

Commentary
Where the death of an employee is anticipated, this gives an opportunity for consideration of alternative steps in advance of the actual death.

Suggested Procedure
Contact the employee (or a nominated member of their family, should the employee not be capable of dealing with the situation) to ask whether they wish to be made aware of entitlements.

Only if the employee and the family wish to discuss it, prepare a schedule comprising:

Benefits and options under the pension scheme. These should be carefully examined in conjunction with pension advisers since it may be that by taking an immediate pension during life, rather than obtaining death in service benefits, the interest of the dependents may be improved, although each case must be reviewed on its merits.

Benefits under a Life Assurance scheme (if separate from the Pension arrangements).

For employees not covered by a Pension Scheme, any arrangements for the granting of an ex-gratia allowance. This is usually paid only to longer service employees or their dependents who, through no fault of their own, were unable to join a pension scheme (thus, employees who were invited to join the pension scheme but declined would not normally be eligible). It needs to be made clear to the employee and the dependents that, as an exgratia allowance, should the organisation control change, it may cease.

For employees not covered by the Pension Scheme or the exgratia allowance, a gift on death of [amount] per year of service is payable.

Payments due under any benevolent fund or voluntary contribution scheme.

Accrued holiday pay, sickness pay and any other entitlements.

Any rights under share option, purchase schemes, etc. Share ownership and arrangements for transmission or transfer of shares following death may also be outlawed.

Visit the employee and/or family with the schedule and explain the contents making repeat visits as necessary.

Although the DSS (in leaflet PP4) states that advice given by an employer regarding pension matters is not subject to the restrictions of the Financial Services Act (which states that the provision of financial advice may only be carried out by an Authorised person), it may still be preferable for such advice to be given by a representative of the Pension scheme advisers. It is more likely that they can provide comprehensive and accurate answers to the type of questions likely to be raised.

Further, if the employee has assets likely to exceed in value the inheritance tax threshold (£263,000, April 2004), the family should be advised to consult a solicitor (the address of the organisation solicitor may be provided if no other is known to the family), so that probate preparations can be commenced and affairs arranged to minimise taxation. This may raise difficulties regarding the payment of outstanding monies, for example, accrued wages, holiday pay etc., on death. If death is certain it may be helpful to pay such amounts over immediately. If they are not paid until after death they will probably form part of the estate of the deceased and thus should be declared for probate purposes. In addition, tax may be required to be paid on them, although this may be less significant than the fact that it may be several months before probate is obtained and the assets can be distributed by the executor(s).

If requested, it may be advisable to revisit the family as requested. If decisions are made by the family, advise those involved both within the Organisation and amongst its advisers, to ensure all relevant benefits are paid swiftly. This would also provide an opportunity for the employer to check that no documentation (other than the death certificate) is outstanding (for example, birth, marriage, change of name certificates and so on). If such certificates are required, suggest the family find and provide them immediately, and that they advise the Organisation immediately death occurs, and provide it with a copy of the death certificate.

The family should be advised that the Organisation is available and ready to help if it can - all they have to do is to ask.

Sudden Death
Although it may appear distasteful to discuss benefits whilst the employee is still alive, experience indicates that, in some cases, their presence can help in this regard since many wish to be aware of, and plan for the disposal of, sums due. However, where an employee dies suddenly, trying to communicate complex figures and options to the relatives may be much more difficult. Indeed, it is possible that it is best left until, say, after the funeral, although this should be explained, with the choice left to the family.

Suggested Procedure
Advise the family that the Organisation is available and ready to help if it can.

If any death benefit, e.g. a death in service gift, is payable, prepare a cheque immediately the news is known, made payable to the next of kin, and take it to the family.

When making contact with the family, check if there is a close relative (who may be less affected by the loss than the immediate family), who can act (if preferred by the family) as liaison between the family and the Organisation.

Check whether the employee (particularly if a member of the pension scheme) completed an Expression of Wish form (that is a form which enables the employee to nominate whom they wish to receive the benefits to which they are entitled under the scheme), and, if so, pass to the Trustees.

Prepare a list of benefits payable as listed under item 2 in the Anticipated Death procedure, and follow other items in that procedure and in the commentary following it.

If the family seems to be short of money and the death in service gift is less than £1,000, review with [chief executive] the possibility of making an advance of £1,000 from other benefits payable, to ensure family has funds for immediate living and for funeral expenses. If agreed, pay such amount with a covering letter stating it is an advance.

Make it clear that should any counselling be required, the Organisation is ready to help, but has no wish to be intrusive.

Work-Related Accident Causing Death
Where death is caused by an ACCIDENT at work, the potential interests of the organisation Employers Liability insurers need to be considered. To avoid infringing the requirements of the policy, most insurers will not wish anything to be said or implied which may indicate an acceptance of liability. The requirements of the policy should be checked.

Advise the insurers of the accident via an incident or claim form. Also advise the insurers that the actions listed in the Sudden Death checklist, as set out above, are to be implemented.

If an advance is to be made in respect of benefits payable, the insurers may require the letter sending the cheque to be marked 'Without prejudice' in order to safeguard their position in the event of any claim.

Follow the procedure set out in the Sudden Death checklist.

If the employee was covered by any accident policy set up by the Organisation, advise the family that there may be a payment under this policy once the insurers have reviewed the circumstances of the accident.

All Deaths
As well as the particular items related to the deaths as set out above, there are general items which need to be addressed in all cases.

Advise work colleagues of the event and of the family wishes, re any collection, etc.

Give internal Newsletter editor (if applicable) synopsis of work career for use in Obituary column.

Obtain a copy of the death certificate.

Advise payroll department requesting payment of all outstanding sums under the contract and issue of P45.

Send P45 to local tax office (advising them if further sums are payable - e.g. in respect of bonuses not yet calculated, etc.).

Send contractual sums outstanding to the family, advising them that they should check the disposal of such sums with the executors of the employee's estate. Explain P45 has been sent to local Inspector of Taxes, give address, tax reference number and employee's National Insurance number.

Establish date of funeral, arrange for flowers (or follow employee or family wishes re flowers/donations etc.) and attend funeral.

One month after funeral, telephone family to maintain contact (if no other contact made).

Add name of anyone in receipt of pension as a result of the death to the mailing list for contact after cessation.

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