RPSM09104950 - Technical Pages: Member benefits: Lump sums: Trivial commutation lump sum: Nominated date
If the lump sum was paid on or after 6 April 2011 you should first read RPSM09105085.
The nominated date for valuing pension rights and the commutation period
| [Para 7(2) and (3), Sch 29] |
A registered pension scheme may only pay a member a trivial commutation lump sum if their pension rights are valued at no more than the commutation limit on what is called the nominated date. The member must have the opportunity to nominate the date when their pension rights are valued for triviality purposes, within certain limitations described below. The nominated date cannot be earlier than 3 months before the first trivial commutation lump sum paid to the member by any registered pension scheme.
The legislation gives an individual one 12-month period for them to commute any trivial benefits they hold, under any registered pension scheme, through the payment of one or more trivial commutation lump sums. This is referred to as the commutation period and is set by reference to the date of the first trivial commutation lump sum payment made (so runs for 12 months from that date). This period is applied to all the registered pension schemes the individual is a member of.
The nominated date must fall either on the first day of the commutation period, or in a 3 month window ending on that first day. The member can therefore plan when the 12-month period will run from, but this will dictate the period the nominated date must fall within.
A trivial commutation lump sum can only be paid between the member’s 60th and 75th birthdays. As such the nominated date cannot be set earlier than 3 months before the member’s 60th birthday (the earliest date the commutation period can start from). There must also be sufficient time before the member’s 75th birthday to enable a payment to be made.
If the member fails to select the nominated day, it will always be the first day of the commutation period.
Example of commuting trivial benefits can be found at RPSM09105050 and RPSM09105060.
| Glossary (RPSM20000000) |
