Part 4Pension schemes etc

Chapter 3Payments by registered pension schemes

Authorised member payments

166Lump sum rule

1

This is the rule relating to the payment of lump sums by a registered pension scheme to a member of the pension scheme (“the lump sum rule”).

  • Lump sum rule

    No lump sum may be paid other than—

    1. a

      a pension commencement lump sum,

    2. b

      a serious ill-health lump sum,

    3. c

      a short service refund lump sum,

    4. d

      a refund of excess contributions lump sum,

    5. e

      a trivial commutation lump sum,

    6. f

      a winding-up lump sum, or

    7. g

      a lifetime allowance excess lump sum.

2

For the purposes of this Part, a person becomes entitled to a lump sum under a registered pension scheme—

a

in the case of a pension commencement lump sum, immediately before the person becomes entitled to the pension in connection with which it is paid, and

b

in any other case, when the person acquires an actual (rather than a prospective) right to receive the lump sum.

3

Part 1 of Schedule 29 gives the meaning of expressions used in the lump sum rule.

4

Schedule 36 contains (in Part 3) transitional provisions about lump sums.