Finance Act 2004

Defined benefits and money purchase arrangements U.K.

Trivial commutation lump sum death benefit U.K.

20 (1) A lump sum death benefit is a trivial commutation lump sum death benefit if— U.K.

(a) the member had not reached the age of 75 at the date of the member’s death,

(b) it is paid to a dependant entitled under the pension scheme to pension death benefit in respect of the member,

(c) it is paid before the day on which the member would have reached the age of 75, and

(d) it extinguishes the dependant’s entitlement under the pension scheme to pension death benefit and lump sum death benefit in respect of the member.

(2) But if the amount of a lump sum falling within sub-paragraph (1) exceeds 1% of the standard lifetime allowance on the date the lump sum is paid, the excess is not a trivial commutation lump sum death benefit.

Winding-up lump sum death benefit U.K.

21 (1) For the purposes of this Part a lump sum death benefit is a winding-up lump sum death benefit if— U.K.

(a) the pension scheme is being wound-up,

(b) it is paid to a dependant entitled under the pension scheme to pension death benefit in respect of the member, and

(c) it extinguishes the dependant’s entitlement under the pension scheme to pension death benefit and lump sum death benefit in respect of the member.

(2) But if the amount of a lump sum falling within sub-paragraph (1) exceeds 1% of the standard lifetime allowance on the date the lump sum is paid, the excess is not a winding-up lump sum death benefit.