Converting small pension to lump sum

If a pension payable to a member of the FPS 1992 or to an eligible dependant is less than limits set by HM Revenue and Customs, and subject to certain other requirements of the tax rules being satisfied (such as the age of the pensioner), the FRA may convert the pension to a lump sum.

This is known as trivial commutation. The amount of lump sum would be worked out based on tables prepared by the Scheme Actuary. If a pension is converted in this way, all other pension rights under the scheme are extinguished.

Alternatively, the FRA may decide to pay a small pension at less frequent intervals than they normally pay pensions.


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