Client feedback

Ann and her team are very knowledgeable and proactive, liaise well with our other advisers and provide the Trustees with an invaluable secretarial service.
Ian Edwards,
Chair of Trustees, Comet
They deliver above expectation when the scheme has a particular challenge.
Ian Edwards,
Many organisations and people provide the services that clients need. In my opinion, the differentiator is in the way those services are provided and to that extent, Kathy embodies the qualities that I have come to value from PSITL. Kathy is organised but not fussy; diligent but not dogmatic; persistent without being pushy and compliant in a pragmatic way. Whilst she takes ownership and drives issues forward, Kathy is a team player who uses her and her colleagues experience to provide services to her trustee client whilst working closely with those like me representing the sponsoring employer. She works collaboratively with advisers but constructively challenges the scope of services, fees and service standards whenever necessary and makes sure that member needs are always taken into account. I enjoy working with her and trust that she will deliver what is required by the trustee and the members they represent in a manner satisfactory to the sponsoring employer.
Stuart Barker,
Internal Pensions Consultant, RSPCA
Kathy, may l take this opportunity to thank you for your assistance. There were many times l thought l was losing my mind during my efforts with Aviva. You were a pillar of support for me and you saw my case through to the very end. I cannot thank you enough but thank you again. It is through people like you who strive for professional fairness as well as thoroughness, HCA has such a good reputation.
Ethel Chimutwe,
HCA International Ltd Staff Retirement Benefits Scheme
It’s a pleasure working with key members of the PSGS team: their experience and leadership means that they know how to get the job done, working in partnership with fellow trustees, employers and advisers to achieve the best result for members.
Mark Smith,
Partner at Taylor Wessing
The Trustee Training course is very good. Excellent coverage of material presented in an easy-to-digest manner and quality of presentation by both presenters.
Jonathan Williams ,
Bangor University

Trivial commutations - back on the agenda?

My colleague asked recently if any of the pension schemes we work with are currently allowing trivial commutations where a member has GMP accrued after 17 May 1990. Co-incidentally, I’d just asked a scheme administrator to let me know when they expected to be able to do these again.

Down but not out

Offering trivial commutations had been put on hold due to uncertainty around tax and the danger there may need to be a further top up following GMP equalisation that might be an unauthorised payment. Most pension trustees wanted to wait for HMRC guidance. It means quite a few cases may have built up over the last few years.

HMRC tax guidance actually came out a while ago. Along with other guidance, principally from the Pensions Administration Standards Association (PASA) and pension lawyers, the situation is now a bit clearer.

What’s the situation now?

Sackers useful GMP equalisation essential planning guidance explains lump sums paid in the past will not stop being authorised simply because further benefit is identified that could not reasonably have been known about at the time of the original payment. This reflects the exceptional circumstances of GMP equalisation and applies once the scheme has chosen its equalisation method.

For trivial commutation – where the monetary limit applies to the value of a member’s benefits across all registered pension schemes - if GMP equalisation takes the value above the monetary limit, any adjustment cannot count as trivial commutation and a small lump sum might be an alternative.

However, paying out a second, even smaller, lump sum later to honour the member’s equalisation rights will be fiddly and could be disproportionately expensive, so trustees may still prefer to hold back on small lump sums where a later equalisation uplift seems likely.

Next steps

Once this has been resolved and factors are available again, it’s worth checking your pension scheme administrators have a proper process in place to check whether members and spouses are eligible for trivial commutation. In my experience, the administrator often overlooks this and is part of the reason why there are so many in scope for doing a bulk exercise!

This is usually a popular option for members - for one of my larger clients, the scheme actuary has advised there’s potential to reduce liabilities by £13m by running a trivial commutations exercise. So, it’s definitely worthwhile but with GMP equalisation grinding on, it may not be back on the agenda for a while yet.



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