Freedom and Choice - The new flexibilities

We thought it would be helpful to provide answers to some common questions being asked by members following the introduction of new pension flexibilities in April 2015. 

The Q&As below are split into three sections:

  • Retirement options from the Plan;
  • Transferring your benefits; and
  • Seeking further advice and information.

We will also be issuing the following leaflets with retirement quotations.

All members with just Defined Benefits

Members with AVCs and Defined Benefits

Members with Defined Contributions only (formerly protected rights)

These leaflets also provide useful information about your options and can be also be downloaded by using the links at the foot of this page.

Updates to Q&As

We may update the below Q&As in light of further experience.  Please therefore refer to this website for more information on your options and choices. 

Your Plan benefits are governed by the Plan’s trust deed and rules and legislation and these are subject to change from time to time.  Whilst this information is intended to be an accurate description of your benefit options at the time of publishing, in the event of any inconsistency, the Plan’s trust deed and rules and legislation will override the information below.

Last updated:  13/04/2015

1 - Retirement options from the Plan

Can I receive all of my defined benefit (“DB”) benefits from the Plan as a cash lump sum?

No, unless your pension is a “trivial amount” (see below in section about trivial commutation lump sums). You are, however, able to commute up to 25% of your DB pension for a tax-free cash lump sum.

You should be aware that the new greater flexibilities only apply to defined contribution (“DC”) pension savings (although see 'trivial commutation lump sums').  In order to take all your Compass DB benefits as cash you will need to transfer to an external DC provider offering access to these payments.  Note that charges are likely to be applied by these providers to process payment.  In addition you will be required to take independent financial advice before transferring your DB benefits if they are valued at £30,000 or more.

Can I receive a trivial commutation lump sum?

This depends on various conditions including the size of your pension and your age (you must be at least 55).  Subject to certain conditions, there are two circumstances where you may be able to take your Plan benefits as a cash lump sum:

a)  if the value of your DB pension is less than £10,000; or
b)  if the value of all of your pension savings from all sources (other than the State pension) is less than £30,000.

Up to 25% of this lump sum would be available tax-free if your benefits are not yet in payment, with the remainder taxed at your marginal rate.

If you are potentially eligible for a trivial commutation lump sum, your retirement quote will automatically include this as an option.  

I have received a retirement quotation including the 'Pension Freedom' leaflet, what should I do now?

The ‘Pensions Freedom’ leaflet is aimed to provide you with more information about the options available to you at retirement.  If you are happy with the benefits and options you have been offered under the Plan, then you do not have to do anything.  Just return your retirement election form to enable your retirement choice to be actioned.

I've heard that pensions are changing from April 2015, can I take more than one lump sum payment from my Plan pension?

No, you can exchange 25% of your Plan pension to provide a tax-free lump sum upon retirement.  The remainder of your pension is paid as a monthly pension.  If you are interested in taking a series of cash payments, or 'drawdown' you would need to transfer your Plan pension to a suitable DC arrangement, but this option should not be considered without taking financial advice.

I want to take my DB pension next month.  However, I have also paid AVC's and, until now, I was told that I would have to buy an annuity with the AVC funds when I retire.  Do the April 2015 changes also apply to my AVC funds?

The Plan will not directly be offering the new flexible options for your AVC's.  However, details of your Plan AVC pension options are set out in your retirement quotation.  This includes the option to take your AVC fund to the open market and purchase an annuity elsewhere, or to transfer your AVC funds to an alternative provider with or without your main Plan pension. You could also choose to use your AVCs to provide your 25% tax free lump sum instead of exchanging part of your DB pension (see above).

I am over 55 and have been quoted three retirement options from the Plan, the third one is to take my whole pension as a trivial commutation lump sum.  Is there any benefit to me transferring to an arrangement that offers 'drawdown'?

We cannot provide financial advice.  You will need to contact a financial adviser.  Please see Section 3 below.

Can I access my tax free lump sum now but delay receiving my DB Plan pension?

No.  The Plan provides you with a DB pension and you are required to start receiving your DB pension at the same time as receiving any tax free lump sum that you choose.

2 - Transferring your benefits

Where can I get further advice about transferring my benefits?

We or the Trustee of the Plan or Compass are not able to provide you financial advice or guidance.  If you are unsure of the right option you should take advice from an independent financial adviser (you will, in any case, be required to do so if the transfer value of your DB pension is over £30,000).  The following website can be used to find a financial advisor:  We would recommend using an adviser who is regulated by the Financial Conduct Authority (FCA).

What will it cost me to transfer my Plan pension to another provider?

If after taking advice you decide you want to transfer your Plan pension, you can have one free transfer value quotation in any 12 month period (subsequent requests within a year will incur a fee of £250).    However, external pension providers are likely to offer a wide range of products, and charges will be incurred with the provider.   The amount of any charge is likely to vary between options and providers.  Please note, pensions already in payment cannot be transferred.

I have been contacted by a company offering to give me my whole pension as cash if I transfer my Plan pension to them?

Pension scams are on the increase in the UK.  'One-off pension investments', 'pension loans' or upfront cash are being used to entice savers.  For most people the offers will be bogus and you could lose most, if not all, of your savings.  You could also receive tax charges of over half the value of your pension for taking an 'unauthorised payment'.  Check the facts before you make an irreversible decision.  Please refer to our leaflet 'A lifetime's savings lost in a moment' which we can send you, or alternatively, you can access more information via the Pensions Advisory Service on or telephone them on 0300 123 1047.

My pension is already in payment. Can I transfer my benefits elsewhere in order to take my benefits as a cash lump sum?

No.  Transfer values are only available for members who have yet to draw their benefits.  However, if the value of your pension is relatively small you may be able to take a one-off cash lump sum under the trivial commutation rules (see above).

3 - Seeking further advice and information

What is the Pension Wise advert I keep seeing? 

Pension Wise is a newly launched brand from April 2015 and is available to give complimentary tailored guidance to people aged 55 or over with DC savings.  This service offers guidance online, over the telephone or face to face and can explain what options you have and help you think about how to make the best use of your pension savings.  Additionally, you can gather information about the tax implications of the different options amongst other things.  This guidance service can be accessed on:  You can also download their leaflet “Your pension: it’s time to choose” here.

This service will not be able to help you in relation to your DB Plan pension.  For more information about DB pensions you can contact the Pensions Advisory Service at

How do I go about finding an adviser?

You can find a financial adviser near you by using or

What is the difference between DB and DC pension schemes?

DB (defined benefit) schemes are sometimes also known as 'final salary' schemes and DC (defined contribution) schemes as 'money purchase' schemes.

The pension provided by a DB scheme, such as the Plan, is based on the length of your pensionable service and your final pensionable salary at date of leaving the scheme.

Benefits from DC schemes, on the other hand, rely mainly on the size of the fund at retirement based on contributions paid together with any investment returns gained by an individual's personal policy. The size of the individual's fund is one of the main factors in determining how much pension you can receive.


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pdfAll members with just Defined Benefits 229.21KB 13th April 2015 Download
pdfMembers with AVCs and Defined Benefits 1.65MB 13th April 2015 Download
pdfMembers with Defined Contributions only (formerly protected rights) 1.24MB 14th April 2015 Download