At a Glance
✓ Trivial Commutation may allow you to take a lump sum instead of a small pension.
✓ Specific age and eligibility conditions must be met.
✓ All LGPS benefits in England and Wales must be taken as part of the commutation.
✓ Trivial Commutation is not available to everyone and tax rules may apply.
What is Trivial Commutation?
Trivial Commutation allows some members to take their LGPS benefits as a one-off lump sum instead of receiving a regular small pension.
This may apply to members, survivors, eligible children and pension credit members, provided the relevant conditions are met.
Could I be eligible?
✓ You will normally need to:
- Be age 55 or over (age 57 from 6 April 2028 unless an exception applies).
- Have total pension benefits within the relevant limits.
- Take all of your LGPS benefits in England and Wales as part of the commutation.
- Meet the relevant tax rules and requirements.
✕ Trivial Commutation may not be available if:
- The value of your benefits exceeds the permitted limits.
- You are unable to take all of your LGPS benefits together.
- You do not meet the relevant tax rules.
The rules are complex and we will confirm whether you are eligible when you make an application.
How do the rules work?
We must calculate the total value of all your pension pots, both LGPS and non-LGPS. If the combined value does not exceed £30,000, we may be able to pay a one-off lump sum as a trivial commutation payment.
The value of your pension is based on its total capital value rather than the annual amount of pension payable.
To check your eligibility, we will need details of the values of any pension pots held outside the LGPS. You will need to obtain this information directly from your other pension providers.
You may have an additional option because we can assess your LGPS benefits separately. Provided the capital value of these benefits does not exceed £10,000, we may be able to pay a one-off lump sum. This is known as a "de minimis" payment.
De minimis rules
- You must be age 55 or over, or have reached GMP age.
- The payment must not exceed £10,000.
- You must not be a controlling director of the sponsoring employer.
- The payment must extinguish your entitlement to benefits under the scheme.
- There must not have been a transfer out of the scheme during the three years before the payment date.
How is the value of the benefits calculated?
20 × annual pension + automatic lump sum (if applicable) + value of your AVC fund (if applicable)
If you started receiving your pension before 6 April 2006, those benefits are normally valued at 25 times the annual pension payable on 5 April 2006.
Calculating a trivial commutation payment is complex. We use factors published by the Government Actuary's Department (GAD) based on your age and the value of your pension.
Income Tax will be deducted from the payment. If you have not yet taken your pension, 25% of the payment will usually be tax-free and the remainder will be subject to Income Tax.
What should I consider before making a decision?
Before deciding whether to take a trivial commutation payment, you should consider whether it is the best financial option for you.
Taking your pension as a one-off lump sum means:
- You will no longer receive monthly pension payments.
- We will have no further liability to provide benefits under the LGPS.
- If you die before your spouse, civil partner or cohabiting partner, they will not receive a survivor's pension.
See more information about trivial commutation on the MoneyHelper website.
Read more on the MoneyHelper website →
Thinking about trivial commutation?
Only if we believe you may meet the criteria will you be offered the option to take a small pension as a lump sum..
If this applies to you and you are interested in this option, please contact us and we will send you further information.