PART 12Supplementary

CHAPTER 2Payment of benefits: general

Commutation of small pensionsI1163

1

This regulation applies if—

a

the pension entitlement of a single capacity member or the pension entitlement of a single capacity member’s beneficiary does not exceed the small pensions commutation maximum; or

b

the total pension entitlement of a dual capacity member or the total pension entitlement of a dual capacity member’s beneficiary does not exceed the small pensions commutation maximum.

2

Unless the member has reached state pension age, this regulation does not apply if—

a

the pension entitlement of the member or the member’s beneficiary under paragraph (1)(a) is equal to or exceeds the member’s guaranteed minimum; or

b

the total pension entitlement of the member or the member’s beneficiary under paragraph (1)(b) is equal to or exceeds the member’s guaranteed minimum.

3

The scheme manager may pay the member or the member’s beneficiary a lump sum of an amount advised by the scheme actuary as representing the cash value of the pension if—

a

the member or the member’s beneficiary consents to receipt of a lump sum in place of the pension; and

b

the requirements of the commutation provisions that apply in the circumstances are met.

4

The payment of a lump sum under this regulation in place of a pension discharges all liabilities under this scheme in respect of that pension.

5

In this regulation—

  • “the commutation provisions” means the provisions permitting the commutation of pensions set out in—

    1. a

      regulation 2 of the Occupational Pension Schemes (Assignment, Forfeiture, Bankruptcy etc.) Regulations (Northern Ireland) 199779;

    2. b

      paragraph 7 of Schedule 29 (authorised lump sums – supplementary) to the 2004 Act (which defines trivial commutation lump sums for the purposes of Part 4 of that Act)80 and, in relation to a pension payable under Part 8 (death benefits), F1... paragraph 20 of that Schedule (which defines trivial commutation lump sum death benefit for the purposes of Part 4 of that Act)81; and

    3. c

      regulation 3 of the Pension Sharing (Pension Credit Benefit) Regulations (Northern Ireland) 200082;

  • “single capacity member” means a member of this scheme who is not a dual capacity member; and

  • “the small pensions commutation maximum” means the amount that is permitted to be commuted having regard to the commutation provisions that apply in the circumstances.