# The Registered Pension Schemes (Authorised Payments) Regulations 2009, Regulation 18: Commencement lump sums paid in error – money purchase arrangements


(1) A payment of a lump sum the whole of which is intended to represent a pension commencement lump sum, but which exceeds the permitted maximum, if—
(a) the lump sum exceeds the permitted maximum only because it has been calculated by reference to the annuity purchase price or the scheme pension purchase price;
(b) an error in that calculation means that the amount concerned is greater than it would have been; and
(c) paragraph (3) applies.
(2) The discovery that the lump sum exceeds the permitted maximum before the payment is made does not prevent the payment’s being within paragraph (1) if the payer took reasonable steps to prevent its being made or its being made in that amount.
(3) This paragraph applies where—
(a) the lump sum is paid before the lifetime annuity or scheme pension is purchased; and
(b) the lifetime annuity or scheme pension is not in the event purchased, or purchased for the amount originally intended, because the error is discovered.
(4) The member’s becoming entitled to the pension commencement lump sum that forms part of the payment within paragraph (1) shall be treated as a benefit crystallisation event for the purposes of the lifetime allowance charge, namely benefit crystallisation event 9 (and this does not prevent the member’s becoming so entitled from also having effect for the purposes of benefit crystallisation event 6).
(5) The amount crystallised for the purposes of benefit crystallisation event 9 is the amount by which the lump sum exceeds the permitted maximum.

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Source: https://www.legislation.gov.uk/uksi/2009/1171/regulation/18 (the official version)
Page: https://openlegislation.uk/registered-pension-schemes-authorised-payments-regulations-2009/regulation-18
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.