Trivial Commutation Help

neocorps

Hello there

My granddad is trying to get a trivial commutation to a pension fund of £1099.01 and hes been put through hell trying to get it.

He received a letter early this week stating that because he has claimed state pension for so long that he has exceeded the maximum allowed benefits amount of £18000 but it is to my understanding that as long as the pension pot does not exceed £2000, it does not matter if you exceed the limit.

So I phoned up again and said that I had received legal advice and stated the above and they have referred it on to their "claims department" which will take 7 working days.

Finally, the pension company in question states that once he becomes 75 he can't take a trivial commutation and his birthday is on the 31st of March. As he has started the claim and as we have letters stating he couldn't do a trivial commutation, if the time to sort this out exceeds his 75 birthday, could he go to the ombudsman. Also, am I right about the amount of the pension being below £2000?

Thanks and best wishes.

kidmugsy

neocorps wrote: »

My granddad is trying to get a trivial commutation to a pension fund of £1099.01 ... am I right about the amount of the pension being below £2000?

You're right. He's entitled to ask for trivial commutation under the "stranded pots" provision as long as he hasn't already done it more than once before. I am not sure whether all pension companies offer "stranded pots" commutation: a friend of mine is currently dealing with one that does.

By the way, my friend feels that his company has been inefficient, and only when he made a complaint by e-mail to 'Compliance' was the matter picked up by someone who seemed to have the authority, intelligence and energy to do something about it.

neocorps

kidmugsy wrote: »

You're right. He's entitled to ask for trivial commutation under the "stranded pots" provision as long as he hasn't already done it more than once before. I am not sure whether all pension companies offer "stranded pots" commutation: a friend of mine is currently dealing with one that does.

By the way, my friend feels that his company has been inefficient, and only when he made a complaint by e-mail to 'Compliance' was the matter picked up by someone who seemed to have the authority, intelligence and energy to do something about it.

Thanks, this is great advice. I have also made a complaint through email!

Best Wishes

Pixieboy

What is also puzzling here is that the state pension is not part of the assessment when looking at trivial commutation limits...
Good luck!

mad_bad_spender

He needs to make it clear to them that he is taking it under small pots rules and not commutation as these are different things and it may be a different form and is certainly different rules. Also state pension is never taken into account for commutation anyway so there has maybe been crossed wires somewhere along the line.

xylophone

http://www.pensionsadvisoryservice.org.uk/workplace-pension-schemes/final-salary-schemes/cashing-in-pensions-(triviality)

mania112

You would think that a provider dealing with this type of call was taught 'state pension does not factor in triviality criteria' on day one.

MikeAppleton

Indeed, the state pension does not come into triviality calculations, not unless he's been paying the old s2p elsewhere through contracting out.

Also I should bring your attention to the upper age limit. It used to be 75 until 6th April 2011 but the upper age limit has now been removed.

It sounds like his provider is either giving you the run around or is clueless.

richardg_ifa

Back to OP....

I'm not sure what type of pension your grandfather has, or who it is with. The following may be worth noting.

Stranded pot commutation has been available under Occupational Pension rules for a number of years, but it was only brought in for Personal Pensions & Stakeholders from April 2012.

However, just because it is in the pension rulebook, a Personal Pension provider does not have to offer it as a feature under their contracts. I speak from experience, as I have had to deal with likes of Prudential & Friends Life who will not offer stranded pot commutation to clients under their range of older contracts.

Richard