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Adviser  >  Technical Central  >  Forum Archive  >  Trivial Pensions

Trivial Pensions

Original Post
84032d 
Posted - 29/06/2004 : 15:10:12
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Most annuity providers are not interested in small funds and L&G for example won't accept tranfers of less than £1000.

What do you do then if a person, say takes his TFC under occupational rules and it leaves him with a tiny fund to do something with - or, a person has several personal pension policies, one of which is for a few hundred pounds.

It is not possible to ask for a payment on the grounds of triviality because of other funds, but it is not possible to buy a pension with such a small fund.

I think the answer is the rules is the rules, but it does seem to be a problem.



JPMiller
Scottish Life Administrator 
Posted - 29/06/2004 : 17:27:07
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Many thanks for your e-mail.

Turning to your first question provided the total benefits under all occupational pension schemes relating to the same employment do not exceed a pension value of £260 per annum then it would be possible to take benefits on the grounds of trivaility. This includes any pension payable from Additional Voluntary Contributions (AVCs) and Free Standing Additional Voluntary Contributions (FSAVCs). I have attached a hyperlink to our triviality factsheet which details the full criteria which must be met for occupational pension scheme flexibility which may be of use:-

http://www.technical-central.co.uk/techcentral/admin/view.asp?ID=230&referer=analysis&subgroup=O

Turning to your second question regarding personal pensions then I'm afraid if triviality has previously been paid out under a personal pension then it cannot be paid again, under any further personal pension. I have attached a hyperlink to our PP triviality factsheet which sets out the full terms and conditions which must be met:

http://www.technical-central.co.uk/techcentral/admin/view.asp?ID=219&referer=analysis&subgroup=P

Anyone who cannot opt for triviality will find that they have to buy a pension from their existing provider if they cannot purchase an open market option annuity elsewhere.

Therefore anyone considering triviality who has not already claimed this under an OPS in respect of the same employment or who has more than one PP plan and has not claimed triviality previously should consider holding off until after A-Day to take advantage of the higher limit (1% of the SLA - £1.5m = £15,000).


James P Miller

                                                                                                         

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