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Can I receive my pension benefits as a one-off lump sum?

If the value of your pension from the Local Government Pension Scheme (NI) is within the HMRC limits you may, when it is due for payment, be able to have it paid as a one-off taxable lump sum instead of a monthly pension. This is known as Trivial Commutation.

In March 2014 the HMRC limits increased, meaning that if the capital value of all pensions that you have (not just those with the LGPS (NI)) is less than £30,000, you may be able to receive them as a one-off lump sum.

NILGOSC will need information on all pensions that you have to check if your benefits are within the HMRC limits. This excludes a spouse’s pension, state pension and state pension credit. 

It should be noted that;

  •  a pension can only be commuted after the age of 55 (or 65 for male members and 60 for female members who have a GMP payable).
  •  the commuted pension can only be paid when your lifetime allowance is available and your total crystallised amount, from all pensions, does not exceed £30,000.  
  •  the commutation payment extinguishes all member’s rights to benefits e.g. no dependants’ benefits would be payable in the event of your death.

Members whose capital value of pension rights in the Local Government Pension Scheme (NI) is less than £10,000 may also trivially commute their pension rights.

If you would like to find out if you are eligible to commute your pension benefits, please advise the Pensions Administration Team when you are claiming payment of your benefits.

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