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  • FIRST POST
    • thebullsback
    • By thebullsback 8th Jan 18, 7:39 PM
    • 381Posts
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    thebullsback
    money taken under triviality reinvested in a Sipp
    • #1
    • 8th Jan 18, 7:39 PM
    money taken under triviality reinvested in a Sipp 8th Jan 18 at 7:39 PM
    I have taken the triviality option on one of my pensions in December 2017. I am 59 m full time employment earning 19,500 per year .
    5000 tax free
    12000 after basic rate tax deducted
    Can I reinvest any of this in a Sipp?
    Thank you for reading
    Keep in your thoughts the poor Beasts of burden around the World and curse All who do them harm.
Page 1
    • dunstonh
    • By dunstonh 8th Jan 18, 8:54 PM
    • 93,036 Posts
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    dunstonh
    • #2
    • 8th Jan 18, 8:54 PM
    • #2
    • 8th Jan 18, 8:54 PM
    You have triggered the MPAA. So, you are limited on your pension contributions to 4000 gross.

    Maybe if its not too late, you could ask the provider if they would reinstate the pension. If not, I thank you for helping the treasury boost its tax take.
    Last edited by dunstonh; 08-01-2018 at 11:27 PM.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • xylophone
    • By xylophone 8th Jan 18, 9:13 PM
    • 25,589 Posts
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    xylophone
    • #3
    • 8th Jan 18, 9:13 PM
    • #3
    • 8th Jan 18, 9:13 PM
    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!!!8217;t trigger the MPAA?

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


    !!!8226; Pension Commencement Lump Sum (PCLS) from
    a flexi-access drawdown arrangement (i.e. no
    income taken)
    !!!8226; 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.

    !!!61623; 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.
    Last edited by xylophone; 08-01-2018 at 9:20 PM. Reason: add bold
    • dunstonh
    • By dunstonh 8th Jan 18, 11:32 PM
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    dunstonh
    • #4
    • 8th Jan 18, 11:32 PM
    • #4
    • 8th Jan 18, 11:32 PM
    But has he? It may be that this was a triviality option from a DB pension?
    There was a reference to Aviva in the last thread. So, I have gone on the basis that it is a personal pension (or money purchase scheme).

    I think we need clarification as to what type of scheme it was.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • TAMB
    • By TAMB 9th Jan 18, 9:44 AM
    • 5 Posts
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    TAMB
    • #5
    • 9th Jan 18, 9:44 AM
    • #5
    • 9th Jan 18, 9:44 AM
    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
    • By Silvertabby 9th Jan 18, 10:10 AM
    • 2,873 Posts
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    Silvertabby
    • #6
    • 9th Jan 18, 10:10 AM
    • #6
    • 9th Jan 18, 10:10 AM
    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.
    Originally posted by TAMB
    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!
    • TAMB
    • By TAMB 9th Jan 18, 10:30 AM
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    TAMB
    • #7
    • 9th Jan 18, 10:30 AM
    • #7
    • 9th Jan 18, 10:30 AM
    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!
    Originally posted by Silvertabby
    Agreed! I was focusing on the reinvestment.
    • thebullsback
    • By thebullsback 9th Jan 18, 11:02 AM
    • 381 Posts
    • 38 Thanks
    thebullsback
    • #8
    • 9th Jan 18, 11:02 AM
    • #8
    • 9th Jan 18, 11:02 AM
    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?
    Keep in your thoughts the poor Beasts of burden around the World and curse All who do them harm.
    • Silvertabby
    • By Silvertabby 9th Jan 18, 12:26 PM
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    Silvertabby
    • #9
    • 9th Jan 18, 12:26 PM
    • #9
    • 9th Jan 18, 12:26 PM
    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?
    Originally posted by thebullsback
    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
    • By thebullsback 9th Jan 18, 1:17 PM
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    thebullsback
    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.
    Keep in your thoughts the poor Beasts of burden around the World and curse All who do them harm.
    • Silvertabby
    • By Silvertabby 9th Jan 18, 1:41 PM
    • 2,873 Posts
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    Silvertabby
    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.
    Originally posted by thebullsback
    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).
    • thebullsback
    • By thebullsback 9th Jan 18, 1:50 PM
    • 381 Posts
    • 38 Thanks
    thebullsback
    I do still have the money.
    Have I basically made a wrong call by thinking I was due to triviality?
    Keep in your thoughts the poor Beasts of burden around the World and curse All who do them harm.
    • Silvertabby
    • By Silvertabby 9th Jan 18, 2:00 PM
    • 2,873 Posts
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    Silvertabby
    I do still have the money.
    Have I basically made a wrong call by thinking I was due to triviality?
    Originally posted by thebullsback
    Quite possibly. The only way to know for sure is to speak to your pension provider.
    • thebullsback
    • By thebullsback 9th Jan 18, 2:24 PM
    • 381 Posts
    • 38 Thanks
    thebullsback
    All monies have been returned to provider.
    Keep in your thoughts the poor Beasts of burden around the World and curse All who do them harm.
    • dunstonh
    • By dunstonh 9th Jan 18, 2:57 PM
    • 93,036 Posts
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    dunstonh
    Were they able to accept it back into the old plan or did they have to create an alternative?

    You are no longer a friend of the Treasury
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • thebullsback
    • By thebullsback 9th Jan 18, 3:36 PM
    • 381 Posts
    • 38 Thanks
    thebullsback
    think its going back in original fund but not sure .Will update when they send me out details.]Just hope I get the tax back I paid on it already
    Keep in your thoughts the poor Beasts of burden around the World and curse All who do them harm.
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