money taken under triviality reinvested in a Sipp

You have triggered the MPAA

But has he? It may be that this was a triviality option from a DB pension?



From Zurich's booklet on MPAA

What events don’t trigger the MPAA?

The MPAA will not be triggered by any of the following
payments:

• Pension Commencement Lump Sum (PCLS) from
a flexi-access drawdown arrangement (i.e. no
income taken)
• A trivial commutation lump sum

However, considering the value of all his pension schemes (which include a DB NHS Scheme to which (as far as I remember), he currently contributes), was he actually entitled to triviality?

I think that this question did come up before in a very long thread concerning the OP's various pension and deferred pension arrangements and more recently.

http://forums.moneysavingexpert.com/showthread.php?p=73434367#post73434367

https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Detailed_SPOT008_V1.5.pdf


You have to be at least aged 60 or aged 55 if benefits are taken after 6 April 2015.

 You have to add all the benefit values of all company pensions/personal pensions/stakeholder pensions/retirement annuities/buy-out plans (but not any state pension) together. If they do not
exceed £30,000 (before 27 March 2014 the limit was £18,000), trivial commutation may be a possibility.

As for contributing to another pension arrangement, he would presumably need to take account of the annual allowance - I assume that he would be using the "income" rather than the PCLS from the triviality to make the contributions within his AA and his relevant income.

A triviality lump sum is only available for defined benefit pensions which are valued under £30,000.

Provided that your pension is a defined benefit plan, and you correctly took the triviality lump sum, then the money purchase annual allowance would not be triggered. Therefore, you would be able to reinvest the money into your pension.

Silvertabby wrote: »

Provided that the total value of all pensions (except for the State pension) is less than £30K.

OP mentions taking the triviality option from 'one of his pensions' - I hope for his sake that he read the small print!

Agreed! I was focusing on the reinvestment.

thebullsback wrote: »

I think I might be in a mess here.My understanding was I could claim triviality on the pension I claimed it on because it was offered to me by the provider of the pension and it was less than £30000 the only other thing I thought was I could not claim another pension within 12month of this claim.
Am I done for? And if yes hoe can I save my skin?

First of all, was this pension definitely a DB rather than a DC scheme, as this does make all the difference. However, only DB schemes tend to use the term 'triviality' so I suspect the former.

Have you had another look at the paperwork, if you still have it? Did you sign a declaration confirming that the total of your pension benefits - DB and DC - were under £30K? Speaking from a LGPS point of view, the triviality offer letters said that the pension may be paid under trivilality rules subject to the value of any other pension benefits excluding the State pension but including DC benefits. However, it was clear that many people just read.. £X... want....sign here. I'm not suggesting you did that, of course, just that you may not have quite understood the letter.

I would take the hit now rather than be found out later - speak to your pension provider to say that you have made a mistake, and want to refund the monies paid.

thebullsback wrote: »

Checked my information and it says
Policy Type ;UK Defined Benefit Sch Replacement.
This is a replacement Policy for a terminated Defined Benefit Occupational Pension Scheme. The benefits were bought out of the scheme fund when the scheme was wound up.Therefore there is no fund value and no annuity rates apply.

Run it past them. Better to get is sorted now when you still have the money to pay back. (assuming that you do, of course).