RPSM09105130 - Technical Pages: Member benefits: Lump sums: Winding-up lump sum: Commutation of pensions in payment

Commutation of pensions in payment and any contingent dependant pension entitlement as part of the winding-up lump sum

Pensions in payment

Pensions in payment may be commuted into a winding-up lump sum. But this can not happen if the member is age 75 or over.

A pension in payment must be commuted if any uncrystallised entitlements held by the member under the scheme are being commuted this way. This is because the winding up lump sum must extinguish the member’s entitlement to benefits under the scheme.

Contingent dependant’s benefits

If applicable, where the scheme holds a contingent dependant’s pension entitlement this entitlement may be commuted with the member’s benefits, and paid as part of the winding-up lump sum payment to the member.