Beyond the final whistle: why pension and benefit issues don’t end with the game

The final whistle may signal the end of a sporting career, but pension and benefit responsibilities can continue for years, making good governance essential for sports organisations.

A claim from the sidelines

A sports organisation provides a lump-sum death benefit through its pension scheme. A long-standing member of staff dies. The trustees pay the full benefit to the person named on the member’s expression of wish form. They do so quickly, without looking much further.

Months later, another potential beneficiary comes forward. They say the trustees never contacted them, never asked about the member’s wider family circumstances and never properly considered who else might have a claim.

Scenarios like this are not uncommon. They show that pension disputes can surface long after a sporting career or employment has ended, and they highlight a key governance point: the process matters as much as the outcome.

Sports organisations as employers and scheme sponsors

Sports organisations are more than clubs, teams and governing bodies. They are also employers, with pension and benefit responsibilities to athletes, coaches, support staff and executives.

An athlete’s career may be short, but pension responsibilities can last for decades. The Professional Footballers’ Pension Scheme illustrates the point: it provides pension benefits for professional footballers and their dependants during their career and after it ends. A player’s pension rights don’t end when their employment does.

Practical considerations for sports organisations

Start with the scheme’s trust deed and rules. They define the class of potential beneficiaries and the scope of the trustees’ discretion.

The first step is to ascertain the range of potential beneficiaries. Trustees don’t need to identify every possible person, but they must make sufficient enquiries to understand the field. Enquiries may cover family relationships, financial dependence, the member’s will and other relevant evidence.

Only once the range of potential beneficiaries has been established can trustees exercise their discretion over how the benefit should be distributed. An expression of wish is not binding. It records what the member wanted, but it’s only one factor. Trustees should weigh it alongside the circumstances of the other potential beneficiaries, particularly if the form is old or family circumstances have changed.

The Pensions Ombudsman regularly considers challenges to death benefit decisions. In Curran, informal decision-making amounted to maladministration. In Winterstein, the decision-maker applied the wrong test by focusing on whether to depart from the expression of wish. The right questions are: who are the legitimate potential beneficiaries, and how should the benefit be distributed among them?

Trustees should keep a clear record of the enquiries made, the evidence considered, any conflicts, the decision reached and the reasons for it. They should act promptly, but not at the expense of a fair and properly documented decision.

There’s also a two-year tax deadline to keep in mind. Broadly, a lump-sum death benefit must be paid within two years of the scheme administrator knowing, or being reasonably expected to know, of the member’s death to receive favourable tax treatment. Missing the deadline can mean that the benefit is subject to income tax or, in some cases, a special lump-sum death benefit charge of 45%.

The inheritance tax position is also changing. Under the Finance Act 2026, from 6 April 2027, most unused pension funds and lump-sum death benefits will fall within inheritance tax. Death-in-service benefits will remain outside inheritance tax, whether or not trustees have discretion over payment. Personal representatives, rather than scheme administrators, will be responsible for reporting and paying any inheritance tax due.

Where practice areas meet

These issues rarely sit within one area of law. Pensions advice is central to questions about scheme benefits and trustee discretion. Employment advice may be needed on scheme eligibility. Private client advice may be relevant where death benefits interact with wills and estate planning. If a decision is challenged, dispute resolution expertise may also be needed.

That joined-up approach matters in sport, where careers can be short, personal circumstances can change quickly and organisations may have limited in-house legal support.

Getting ahead of the game

With the inheritance tax changes taking effect from 6 April 2027, there has never been a better time for sports organisations to review how death benefits are managed. Most unused pension funds and lump-sum death benefits will come within inheritance tax for the first time, although death-in-service benefits will remain outside it.

Three steps are worth taking now:

1. Review your scheme rules so you know who can receive a death benefit and on what terms
2. Remind staff to keep their expression of wish forms up to date, particularly after major life events such as marriage, separation or the birth of a child
3. Put a clear process in place for when a member dies, so that trustees identify the range of potential beneficiaries before deciding how the benefit should be distributed and record the decision and the reasons for it.