Today the long-awaited Registered Pension Schemes (Authorised Payments) Regulations 2009 (SI 2009/1171) were laid before Parliament. Although the Regs come into force on 1 June 2009, concessions relating to pension errors and lump sum errors are back-dated to A-Day (6 April 2006). Provisions permitting commutation of 'stranded pots' and certain other payments, on the other hand, are delayed until 1 December 2009. An exception, permitting payment of a trivial commutation lump sum (TCLS) in conjunction with a pension commencement lump sum (PCLS), is the subject of a separate accompanying SI, The Taxation of Pension Schemes (Transitional Provisions) (Amendment) Order 2009 (SI 2009/1172); this comes into force on 1 June 2009.

The Order and the Regs contain a number of significant extensions to the scope of authorised payments which have been made as a result of a consultation by HMRC on an initial draft published a year ago in conjunction with the Finance Bill 2008 (see Aries report). The UK pensions industry will welcome the diminution of the administration burden created by these circumstances.

However, there will be widespread disappointment that the proposed scheme-specific trivial commutation limit has remained at £2,000 (Using the normal HMRC valuation basis, RVF, this would be equivalent to a pension of £100 pa, or a pension in payment pre-A Day of just £80 pa. However, as scheme-specific commutation factors must be used, the actual pension that can be commuted may be larger or smaller than those illustrative amounts). Furthermore, the Government has declined to extend scheme-specific trivial commutation of small pots to personal pensions, and thereby created a major difference from occupational and public service pension schemes under what was supposed to be a single pensions tax regime regime universally applicable to all kinds of registered pension scheme.