SCHEDULES

SCHEDULE 29Registered pension schemes: authorised lump sums—supplementary

Part 1Lump sum rule

Trivial commutation lump sum

7

(1)

For the purposes of this Part a lump sum is a trivial commutation lump sum if—

(a)

it is paid when no trivial commutation lump sum has previously been paid to the member (by any registered pension scheme) or, if such a lump sum has previously been paid, before the end of the commutation period,

F1(aa)

it is paid in respect of a defined benefits arrangement, F2or in respect of a collective money purchase arrangement, F3or in respect of a scheme pension payable by the scheme administrator to which the member has become entitled under a money purchase arrangement F4that is not a collective money purchase arrangement (an “in-payment money-purchase in-house scheme pension”), F5or in respect of any combination of such arrangements and scheme pensions,

(b)

on the nominated date, the value of the member’s pension rights does not exceed the commutation limit,

(c)

it is paid when all or part of the member’s F6lump sum allowance is available (see paragraph 12A),

(d)

it extinguishes F7any entitlement to defined benefits F8, and any entitlement to collective money purchase benefits, F9, and any entitlement to payments of in-payment money-purchase in-house scheme pensions, that the member has under the pension scheme, and

(e)

it is paid when the member has reached F10normal minimum pension age (or the ill-health condition is met) F11....

(2)

The commutation period is the period beginning with the day on which a trivial commutation lump sum is first paid to the member and ending 12 months after that day.

(3)

The nominated date is the day within the period of three months ending with the first day of the commutation period nominated by the member (or, if no date is nominated, is the first day of the commutation period).

(4)

The commutation limit is F12£30,000.

F13(4A)

The Treasury may by order substitute for the amount for the time being specified in sub-paragraph (4) such larger amount as is specified in the order.

(5)

The value of the member’s pension rights on the nominated date is the aggregate of—

(a)

the value of the member’s relevant crystallised pension rights on that date (calculated in accordance with paragraph 8), and

(b)

the value of the member’s uncrystallised rights on that date (calculated in accordance with paragraph 9).