Triviality Rules

If the value of your funds from all your registered pension arrangements is less than 1% of the Standard Lifetime Allowance (SLA) (£17,500 in tax year 2009/10) you may be eligible totake your benefits as a lump sum on the grounds of triviality.

You are eligible to commute your pension arrangements if you can say yes to all of these conditions:

• You are aged between 60 and 75.
• You include all of your registered pension arrangements for the purpose of calculating whether they fall within the rules and can be commuted. (This does include all pension arrangements including, deferred schemes, including deferred company schemes, ask if you are unsure.
• You are applying for commutation of your registered pension arrangements within a single 12-month period. (It is important that you realise you do not have to commute all of your benefits from all of your registered pension schemes. However, benefits that are part of the same registered pension scheme must be taken at the same time.)
• The value of your funds from all your registered pension arrangements are not worth more than 1% of the Standard Lifetime Allowance (SLA) at the Nominated Date. (This DOES include all benefits which have been contracted-out with a pension provider. This does NOT include any benefits under the Basic State Pension OR the State Second Pension (S2P), formerly called the State Earnings Related Pension Scheme (SERPS) which will be paid by the state, any widow(ers), civil partners or other dependant’s pensions.)

If the total value of your pension benefits is less than £17,500 (2009/10 tax year) and you have taken your pension benefits on the grounds of triviality there is a tax charge.