Thanks again for your fulsome and very helpful input - your prompt response is greatly appreciated. I'm now in a much better position to make an informed decison as the need arises early in the New Year.I hope the discussion proves useful to any third party browser.

Kind Regards,

Mike (MIZEEKS)

Whether they are loathe to adminster the benefit or not, they have no right to force you to transfer.

To be honest, I'm not sure what your rights are in terms of the payment. Were you perhaps looking for it to be paid annually for example? I've seen this happen in the past, but I dont know whether you have the right to demand it.

You might have some options in relation to the pension though, but you'll really need to check out your booklet or Trust rules. For example, usually you'll be allowed to exchange up to 25% for a tax-free cash lump sum, so might be worth considering depending on what conversation rates they offer you.

They could secure your benefit for you with an insurance company, but it would need to be the full £500 pa regardless of how much the insurance company wants for that annuity. If they just pay you a transfer value, you'd need to find somewhere to take it yourself (and I'm fairly confident a standard transfer value wouldnt buy you a £500 pension, although they might look to offer you an enhanced value to encourage you to tranfer).

The old trivial commutation rules used to look at just the pension scheme in question, but the limit for that was only £260pa so you wouldnt have qualified to take the lump sum then either. I believe they are looking at changing the rules again, but I dont know when or if that will actually happen.

This sum is a preserved pension benefit dating back to the mid seventies when I was made redundant. I subsequently worked for another firm and paid into their pension scheme which had a retirement age of 62.5yrs (and did not allow for transfer in of benefit from previous scheme). I am now in receipt of a pension from this second firm since 2007. I also set up an approved private pension scheme which benefit has been in payment since 2008.I am loathe now to set up another approved PPS with effect 2010 just to accept the benefit accruing from the pension payable from my first employer, particularly such a marginal amount.I know (having spoken with the Trustees Secretary) that they are loathe to administer such a small pension benefit, and it was in this context that I raised my original enquiy re commuting to lump sum. If the issue cannot be resolved by accepting a lump sum in lieu of pension of £500p.a., it appears that my only recourse is to insist on payment of pension by the pension fund trustees. Have I then any rights regarding modality of payment?

You'd need to set up an approved personal pension to accept the transfer value. However, if you're just going to take the transfer value then immediately buy an annuity, I'd be surprised if you are offered a high enough transfer value to pay the same amount of pension therefore not making it worth your while to transfer.

Thanks to you both for your response. Interesting point raised by Leeg - I'm already in receipt of pension (> £10k p.a.) from my main employer since I reached 62.5 yrs. Does that mean that £500 annuity will have to be paid by the trustees of the other pension fund when I reach 65 since there is not a third intact pension fund to which I may transfer accrued value? (Benefit I believe provides for level pension without provision for spouse.)

Just a point to note, you will only be allowed to commute your pension for a lump sum in this way if your total pension from ALL registered pension schemes is less than around £900 per annum.

The Trustees may offer you a transfer value, which is a lump sum that you must take to another pension scheme.

In terms of the reasonable amount to expect, that really depends on what benefits come attached with the pension. Does it increase in payment? Is there a spouses pension payable on your death? The difference between the cost of a level pension and a pension increasing with inflation is quite significant.

You can buy a £500p.a. annuity for £5k - £6k.

Next January I qualify for payment of a small presrved pension (around £500 pa) from a former employer. This should prove an unreasonable administrative burden to the Trustees, and I imagine they willl wish to offer a lump sum to" buy out" their obligation.What would be a reasonable sum/term in pension years to expect?

ps :I'm a 64 yr old male(65 at qualifying date), with quintuple heart bypass Jan 1995, type 2 diabetes (tablet controlled) 2000, asthma 2007. Otherwise I'm in great shape!! - Pension is fixed sum.