In Mairead's case, what is the maximum lump sum death-in-service benefit the scheme could pay if she died in service today?

• A. €140,000
• B. €190,000
• C. €180,000
• D. €230,000

Answer: (C)

Death-in-service lump sums are typically calculated as a multiple of pensionable pay, commonly four times the pensionable pay, but many schemes cap the amount at a maximum. In Mairead’s case, four times her pensionable pay amounts to €180,000, and this hits the scheme’s cap. Therefore the maximum lump sum the scheme could pay if she died in service today is €180,000. If her pay were higher than €45,000, the cap would still apply, keeping the maximum at €180,000; if her pay were lower, the lump sum would be four times her lower pay.