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    • dave1952
    • By dave1952 17th Mar 17, 12:03 PM
    • 6Posts
    • 0Thanks
    Lloyds Bank Grad Pension - Trivial Commutation too low?
    • #1
    • 17th Mar 17, 12:03 PM
    Lloyds Bank Grad Pension - Trivial Commutation too low? 17th Mar 17 at 12:03 PM
    Hi folks
    I was surprised to discover when I reached 65 recently that LLoyds Bank owe me 7.28 a year as I was contracted out of State Graduated Pension when I worked for them in the early 1970's.
    They propose to settle their liability in full under the Scheme's Trivial Commutation rules by making one payment of 71.34.
    I hope to live beyond 75 so this seems too little to me. Am I being unrealistic or are they being stingy?
    There's no mention of any right of appeal or challenge. Is there anything I can do?
    Many thanks.
Page 1
    • molerat
    • By molerat 17th Mar 17, 12:55 PM
    • 18,581 Posts
    • 12,735 Thanks
    • #2
    • 17th Mar 17, 12:55 PM
    • #2
    • 17th Mar 17, 12:55 PM
    Take the 7.28 a year. It will cost them more than that to pay it Or are they saying they have the right to impose the triviality option ? The problem is that the amount bears no real relationship to the actual pension and is based on the reduction in the scheme liabilities by giving you the cash, even with them being generous you could not expect more than about 150.
    Last edited by molerat; 17-03-2017 at 1:02 PM.
    • xylophone
    • By xylophone 17th Mar 17, 3:38 PM
    • 25,371 Posts
    • 14,967 Thanks
    • #3
    • 17th Mar 17, 3:38 PM
    • #3
    • 17th Mar 17, 3:38 PM

    Some information on Grad on P33.

    Also in a briefing note for House of Commons Contracting out of the State Second Pension
    Standard Note: SN/BT 4822
    Last updated: 23 March 2011
    Author: Djuna Thurley
    Section Business and Transport Section

    Contracting out was introduced in April 1961 with the graduated pension scheme which yielded Graduated Retirement Benefits (GRB). Employers were able to contract out and pay lower National Insurance Contributions (NICs) if they provided Equivalent Pension Benefits
    (EPBs). The Office of Tax Simplification, which looked at contracted-out rebates in 2010/11, noted that it was !!!8220;unclear what the original policy rationale was.!!!8221;2 The scheme was wound up in 1975 and most contracted-out employers bought prospective pensioners back into the state scheme, thereby removing any need to preserve EPBs.

    It would seem that you had a tiny preserved EPB which is being "trivially commuted"?
    • dave1952
    • By dave1952 19th Mar 17, 7:16 PM
    • 6 Posts
    • 0 Thanks
    • #4
    • 19th Mar 17, 7:16 PM
    thank you both
    • #4
    • 19th Mar 17, 7:16 PM
    Many thanks both for your helpful comments.
    I think that I will ask for a copy of the Scheme Rules and my right of appeal.
    It's only a tiny amount but it's the principle that counts!
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