A boost to Trivial Commutation but not to Simplification!

Laura Cumming

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Another change in administration procedures coming up soon!
Earlier in the year the Registered Pension Schemes (Authorised Payments) Regulations 2009  came into force, forgiving the tax penalty on certain payments which were previously deemed unauthorised, e.g. payments made in error and payments of arrears of pension due after the death of a member.
From 1 December 2009 these regulations allow occupational pension schemes to commute trivial pensions, in certain circumstances, without any reference to the benefits a member may have in other unrelated pension schemes or contracts. This will be limited to pensions with a capital value of less than £2,000. The usual taxation procedures will apply.
Unfortunately these regulations do not apply to individual insured arrangements so sadly another blow to the ‘one size fits all’ regime affectionately known as Pensions Simplification!