PSI8.3.3 - Commutation for Triviality or Serious Ill Health: - Aggregation of Benefits

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

[PN8.12]

Triviality commutation can be permitted only if the total aggregate benefits (including the pension equivalent of any lump sum benefits) payable from all schemes in respect of the employment are not more than £260 per annum. If total benefits exceed that amount any residual pension left after taking the normal lump sum retirement benefit cannot be commuted even though it may not exceed the triviality limit. For this purpose, the aggregate total benefit

• does not include any pension debit where the employee’s benefit entitlement in the scheme was permanently reduced by a pension sharing on divorce order (see PSI3.5.4), but
• does include any pension credit benefits where someone has benefits in the scheme that relate to both an employee membership and an ex-spouse membership (see PSI24.1.6).

Also see PSI24.1.5 in relation to an ex-spouse member whose only benefits in the scheme are pension credit benefits.