With the Finance Act 2016, it is possible in certain circumstances to commute an “in payment money purchase In house scheme pension” on the grounds of triviality. An ‘in payment money purchase in-house scheme pension’ is defined as a scheme pension payable by the scheme administrator.

This means that the following benefits can be commuted on the grounds of triviality:

• uncrystallised defined benefit pension rights;
• defined benefits scheme pensions that are in payment; and
• in payment, money purchase in-house scheme pensions.

Certain conditions for payments after 16^th September 2016:

• The member has not been paid a trivial commutation lump sum previously (from any registered pension scheme), except any earlier payment within the commutation period;
• The lump sum is paid in respect of a defined benefit arrangement and/or an in-payment money purchase in-house scheme pension;
• The value of the member’s pension rights (defined benefit and money purchase, including those previously crystallised for lifetime allowance purposes) on the nominated date does not exceed the commutation limit of £30,000;
• The lump sum is paid when the member has available lifetime allowance;
• The lump sum is paid when the member has reached the age of 55
• The lump sum extinguishes the member’s entitlement to defined benefits and in-payment money purchase in-house scheme pensions

The nomination date is the date chosen by the member on which all pension benefits are valued.

Any payment must be made within the twelve month commutation period. This starts when the first commutation payment is made. It can start no earlier than the nominated date and no later than three months after the nominated date

An individual can only have one commutation period in their lifetime