In Luke's retirement scenario, the retained lump sum is from a previous employer's pension scheme. Which option best describes this retained lump sum?

• A. A lump sum from Luke's current scheme
• B. A lump sum from a previous employer's pension scheme
• C. A regular pension payment
• D. A tax refund

Answer: (B)

A retained lump sum is a one-off cash benefit tied to a pension arrangement from a former employer, not ongoing income or something else like a tax refund. In Luke’s case, the lump sum being from a previous employer’s pension scheme means it comes from that old scheme rather than his current scheme, and it isn’t a regular pension payment. It’s a lump sum tied to a past arrangement, which distinguishes it from ongoing retirement income or non-pension refunds.