RPSM09105060 - Technical pages: member benefits: lump sums: trivial commutation lump sum: example 2 - payment of a trivial commutation lump sum

If the commutation period began before 27 March 2014, please refer to the archived version of this manual in The National Archives. http://webarchive.nationalarchives.gov.uk/20140504142140/http://www.hmrc.gov.uk/manuals/rpsmmanual/RPSM09104900.htm

Catherine has uncrystallised benefits held under schemes A, B and C worth £12,000, £12,000 and £5,000 respectively. She is also in receipt of two pensions from other registered pension schemes, which are relevant crystallised pension rights, as follows.

  • From scheme D, a pension of £2,000 per annum, which started in 2001 at the rate of £1,200 per annum and was payable on 5April 2006 at the rate of £1,500 per annum, and
  • From scheme E, a scheme pension of £900 per annum, which started in the 2007/08 tax year at the rate of £700 per annum. At the same time the scheme pension started Catherine was also paid a pension commencement lump sum of £2,000.

Catherine’s uncrystallised rights are valued at £29,000. Her relevant crystallised pension rights are valued as follows (see RPSM09104990 for details of calculating these values)

Scheme D - £37,500

Scheme E - £16,000

This means Catherine’s total pension rights are worth £82,500 (£29,000 + £37,500 + £16,000) on 1 January 2015). This is more than the commutation limit of £30,000 for commutation periods beginning on or after 27 March 2014.

So none of Catherine’s benefits under scheme A, B or C may be commuted and paid as a trivial commutation lump sum. Nor can her pensions in payment be commuted as trivial commutation lump sums.

  Glossary (RPSM20000000)