Taking all your pension benefits as a lump sum

If your LGPS monthly pension is small, you may be able to take all your benefits as a one-off lump sum payment. This is known as a trivial commutation.

What is Trivial Commutation?

A trivial commutation is where your pension benefits are paid as a single payment instead of a monthly pension. Trivial commutations extinguish your rights in the pension scheme and those of any dependants; this means that after a trivial commutation is paid, no further benefits would be due to you or any dependants at any point in the future.

The rules governing whether you can take a trivial commutation are quite complex and depend on whether you want to take a trivial commutation from more than one pension scheme or from the LGPS only.

Trivial commutation from more than one pension scheme

If the total value of your benefits is less than £30,000* and your benefits are in more than one scheme (for example, LGPS and non-LGPS but not including state pension) you may be able to take a trivial commutation payment. Generally, you must be:

• Age 55 or over, or if you have scheme membership before 6 April 1997, age 60 for a female or age 65 for a male; and

• You have not received payment of a previous trivial commutation lump sum. If so, it has been paid within the last 12 months.

• If you have an ongoing pensionable employment, trivial commutation is not an option.

Trivial commutation from the LGPS only

If the total value of your pension benefits in the LGPS is less than £10,000* you may be able to take a one-off payment. If you choose to take a trivial payment, it's important to note that:

• You must have left the scheme after 31 March 2008.

• You must be age 55 or over, or if you have scheme membership before 6 April 1997, age 60 for a female or age 65 for a male; and

• The value of your LGPS benefits must include any benefits you have in other LGPS funds in England and Wales.

• You have not transferred any benefits out of the LGPS in the last 3 years; and

• If you left the pension scheme before 1 April 2014, you must not have received a transfer into the scheme during the 5 years preceding the date of the commutation payment; and

• You are not a "Controlling Director" of any employer in the LGPS.

It’s important to note that 75% of a trivial commutation lump sum payment is subject to tax.

If you believe you meet the conditions listed and might wish to receive a Trivial Commutation Lump Sum, as an alternative to a monthly pension please contact us at customerservices@sypa.org.uk

*Please note: The capital value is the value of your pension benefits and not the annual amount of pension payable. To test against the £10,000 and £30,000 limit, pensions being paid are valued at 20 times the annual pension income. For example, a pension of £750 a year would be valued at £15,000 (20 x £750). If you received a tax-free lump sum when the pension commenced, the amount of the lump sum is added to this value. If you started receiving your pension before 6 April 2006, these are normally valued at 25 times the annual pension income as it was on 5 April 2006, and you do not need to add on any previous lump sums.