Drama Trivial commutation NHS Pensions

Nickysolarlilo

I decided to take my 2008 NHS pension as a trivial commutation, it's capital value is around 22k. I plan to buy a camper this year and have some fun. I duly filed the AW8 form, the form to request trivial commutation AND two cover letters requesting a trivial commutation. I have chosen to retire and return so that I can continue to pay into my my 2015 scheme, which I'm leaving alone until I actually retire. 
NHS pensions advise that the process takes 3 months, sure enough, I got a credit into my bank. But it wasn't what I was expecting. NHS pensions have awarded me 25% and the rest at £50 a month. Fast forward 5 weeks and I'm in limbo, it took 4 weeks for the awards team to email me and tell me that they will issue a sub award but that I must be aware that
A. they are very busy
B. Tbey deal with tbousnads of other pensions
C. They cant possibly give me a timescale
I am so frustrated and feel utterly powerless, when I phone its like speaking to a royal guard, the awards team who have the power are like the inner sanctum, You are never allowed to speak with them directly. 
Not one person has ever apologised, instead I'm made to feel unimportant and like I'm asking for a hand out. 
I filed a complaint, two weeks later they emailed to ask me if I wanted to make a formal or informal complaint along with a link to their very wordy complaint policy. Formal? I think?
I'm in limbo with no idea when this will be resolved, feeling really stressed out, angry and frustrated. 

Stubod

..same here, underpaid my pension when I started it 5 months ago and despite e mails and telephone calls all you get is the stock answer of "yes we know it is incorrect, but we are unable to give you any timescale as to when it will be resolved, or when you will get your money". Between spouse and myself we have 3 NHS pensions and all 3 have been paid incorrectly. Assumes that as everything you earned got fed into a computer against your NI number (or similar), and it should just be a case of pressing a button and the system calculates what you should be getting....obviously not, their systems must be useless....?? Good job we did not treat pts in the same way!..

Flugelhorn

Stubod said:

.. Assumes that as everything you earned got fed into a computer against your NI number (or similar), and it should just be a case of pressing a button and the system calculates what you should be getting....obviously not, their systems must be useless....?? Good job we did not treat pts in the same way!..

provided the info got sent by employer (or you if self employed ) - there was an error in mine where they missed a year - never found out whose fault that was, fortunately they accepted my evidence of the missing year.   also  whether pension is officer /practitioner or mix - makes the calculations more complex + getting wte salaries as it isn't actually always related to pay

dunstonh

I am so frustrated and feel utterly powerless, when I phone its like speaking to a royal guard, the awards team who have the power are like the inner sanctum, You are never allowed to speak with them directly. 

If you put them on the phone, they would never get any work done.  Its standard across most walks of life to put lower skilled, lower paid people on the phones.

Marcon

Nickysolarlilo said:

I decided to take my 2008 NHS pension as a trivial commutation, it's capital value is around 22k. I plan to buy a camper this year and have some fun. I duly filed the AW8 form, the form to request trivial commutation AND two cover letters requesting a trivial commutation. I have chosen to retire and return so that I can continue to pay into my my 2015 scheme, which I'm leaving alone until I actually retire. 
NHS pensions advise that the process takes 3 months, sure enough, I got a credit into my bank. But it wasn't what I was expecting. NHS pensions have awarded me 25% and the rest at £50 a month. Fast forward 5 weeks and I'm in limbo, it took 4 weeks for the awards team to email me and tell me that they will issue a sub award but that I must be aware that
A. they are very busy
B. Tbey deal with tbousnads of other pensions
C. They cant possibly give me a timescale
I am so frustrated and feel utterly powerless, when I phone its like speaking to a royal guard, the awards team who have the power are like the inner sanctum, You are never allowed to speak with them directly. 
Not one person has ever apologised, instead I'm made to feel unimportant and like I'm asking for a hand out. 
I filed a complaint, two weeks later they emailed to ask me if I wanted to make a formal or informal complaint along with a link to their very wordy complaint policy. Formal? I think?
I'm in limbo with no idea when this will be resolved, feeling really stressed out, angry and frustrated. 

I don't think this is going to make you feel much better (if at all!), but if you look at https://www.nhsbsa.nhs.uk/sites/default/files/2019-01/Trivial%20commutation%20factsheet%20%2801.2019%29%20V6.pdf

you'll get an idea of the hideous complexities involved in what to you is a simple request. If you were expecting a one-off lump sum, look at the section on the 2008 scheme and note:

2008 Section: Members of the 2008 Section are normally entitled to a pension only, however some of the pension can be exchanged to provide for a lump sum or bigger lump sum. More information is available on our website: www.nhsbsa.nhs.uk/nhs-pensions.

It's not clear to me that you can trivially commute a 2008 pension with a capital value of £22K (as opposed to a 1995 pension), although perhaps someone with better knowledge of the NHS scheme will be able to confirm?

The poor devils landed with the administration of this impossibly complicated scheme are doubtless as frustrated as you are, and will be on the receiving end of endless complaints - some well founded, others a simple misunderstanding of just how difficult the whole darned process is. Make no mistake, this isn't just 'press a button' and there you are...

Completely agree that an apology and a bit of sympathy and understanding would go a long way to making an unhappy member feel less disgruntled, but making a formal complaint won't speed things up and will simply soak up resources which might be better deployed actually getting the job done.

tacpot12

A formal complaint would seem to be the way to go. I would ask for compensation equal to interest at 8% pa. (This is the rates the courts use for commercial debts). 

If you make a formal complaint, you can then go to the Pension Ombudsmand who is required to investigate maladminstration. I would make sure you use that word in your complaint. 

Silvertabby

Did NHS pensions actually ever tell you that you could take the whole £22K as a trivial commutation? Or did you mis-read the rules and assume?

The NHS regs, see Marcon's link, seem to be overly complicated - but they do go on to say that a trivial commutation is only payable when the total amount of ALL pensions (excluding the State pension - my addition for clarification)  is less than £30K.  This is in line with current HMRC regulations for all DB pensions.

£8K of additional benefits in the 2015 scheme  
alone would make you ineligible for a trivial commutation, and I suspect that what NHS pensions have done is given you maximum normal commutation (ie, 25% of notional fund value as tax free cash with remainder as an annual pension).  

Phoenix72

tacpot12 said:

A formal complaint would seem to be the way to go. I would ask for compensation equal to interest at 8% pa. (This is the rates the courts use for commercial debts). 

If you make a formal complaint, you can then go to the Pension Ombudsmand who is required to investigate maladminstration. I would make sure you use that word in your complaint. 

First of all, the OP needs to establish if in fact it is maladministration and not a misunderstanding if the rules. Like the others that have commented I suspect the latter and OP has made plans based on money they were never going to get up front.

xylophone

https://www.nhsbsa.nhs.uk/sites/default/files/2019-01/Trivial commutation factsheet (01.2019) V6.pdf

Paying small pensions as a one off payment (known as trivial commutation) is subject to HM Revenue and Customs (HMRC) rules. The current commutation limit applies to pension benefits not exceeding a capital value of £30,000. The procedure for assessing whether NHS benefits can be trivially commuted is as follows:

•   Where the capital value of the benefits built up within the NHS Pension Scheme and with any other pension providers is £6,000 or less, the member will be sent a choice letter and it is their decision to either take their normal benefits or to have the pension benefits trivially commuted into a once and for all payment.

•   Where the capital value of the benefits built up within the NHS Pension Scheme and with any other pension providers is more than £6,000 but not more than £30,000, normal benefits will be paid unless the member asks for their pension benefits to be trivially commuted. This request should be made at awarding stage however there is no statutory provision to prohibit the cancelling of an award and replacing the pension with a trivially commuted payment, if that is the member’s wish.

OP says

I have chosen to retire and return so that I can continue to pay into my my 2015 scheme, which I'm leaving alone until I actually retire. 


What is the value of the 2015 benefits?

And does he have any other pensions?

It seems likely that he will have fallen foul of the "£30,000 Rule"?

 

Marcon

Silvertabby said:

Did NHS pensions actually ever tell you that you could take the whole £22K as a trivial commutation? Or did you mis-read the rules and assume?

The NHS regs, see Marcon's link, seem to be overly complicated - but they do go on to say that a trivial commutation is only payable when the total amount of ALL pensions (excluding the State pension - my addition for clarification)  is less than £30K.  This is in line with current HMRC regulations for all DB pensions.

£8K of additional benefits in the 2015 scheme  
alone would make you ineligible for a trivial commutation, and I suspect that what NHS pensions have done is given you maximum normal commutation (ie, 25% of notional fund value as tax free cash with remainder as an annual pension).  

Thanks as always. I couldn't see why trivial commutation was a possibility, given that OP has membership of the 2015 scheme on top of the £22K capital value of the 2008 membership.

tacpot12 said:

A formal complaint would seem to be the way to go. I would ask for compensation equal to interest at 8% pa. (This is the rates the courts use for commercial debts). 

If you make a formal complaint, you can then go to the Pension Ombudsmand who is required to investigate maladminstration. I would make sure you use that word in your complaint. 

Not really, since it looks as if OP has simply misunderstood the hopelessly complicated rules of the NHS scheme and its various sections.

Nickysolarlilo

Thank you for contacting the members helpline on 16 April 2024 regarding trivial commutation.

 

 

I have asked for your award to be recalculated to consider your request to take your benefits as trivial commutation.

 

We do not issue dated timescales for the processing of a sub award due to the volume of awards we have to process and the complexities that can arise.

 

Giving a set timescale sets an expectation we may not be able to adhere to.

 

We advise your sub award will be calculated in due course and all pension that may be outstanding is back dated.

 

You will receive a retirement notice once this has finished processing.

 

We thank you for your patience