PSI8.3.9 - Commutation for Triviality or Serious Ill Health: Scheme Rules

(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)

Scheme rules may specify the current triviality commutation limit. A rule amendment is then needed if advantage is to be taken of any future increase in the limit. Alternatively, if schemes wish to avoid the need for further rule amendments whenever the limit is raised they can provide for automatic increases. A suitable way is for the rule to specify a limit of

“£260 per annum or such higher amount which may be prescribed from time to time by regulations made under paragraph 15(4) of Schedule 16 Social Security Act 1973 and (if the scheme is contracted-out) section 39(1) Social Security Pensions Act 1975 and is consistent with approval of the scheme under Chapter 1, Part XIV, ICTA 1988”.

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