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EPN - This EPN has been superseded by EPN 488

Audience:

  • Pension Leads and HR Managers
  • Internal Communications Managers

Action:

  • To note the update on provision of Lifetime Allowance Letters
  • Members in receipt of Lifetime Allowance letters may approach employers to arrange a further pensions and tax guidance sessions.
  • For civil service employers, ensure that you give members the opportunity to attend a pensions and tax guidance sessions if they have received a lifetime allowance letter – this will be at employer cost.
  • To note the attached document that provides the list of employers whose staff will receive an LTA letter

Timing:

  • Immediate

Detail

Last year, letters were issued to members whose pension benefits in the Civil Service Pension arrangements were close to, or exceeded the Lifetime Allowance.

The Lifetime Allowance is the maximum amount of tax relieved pension savings an individual can build up over their lifetime. It is set by government and reviewed regularly. If member’s benefits exceed this allowance they will have a tax charge to pay when they take their benefits at retirement.

We are issuing letters again this year, a total of 304 across the scheme membership, to alert individuals to consider their position, seek advice and take action to limit their exposure to a potential tax charge. Letters will be issued to members where we have calculated that their Civil Service Pension benefits exceed 90% of the Lifetime Allowance. From 6 April 2016 the Lifetime Allowance is £1 million. Some of these members will have received a similar letter last year.

The Lifetime Allowance letters will be issued by MyCSP directly to members’ home addresses or to a member’s office address where home addresses are not provided for security reasons. The text of the letter is attached for information.

Letters will be issued by the end of January 2017 and the pension lead at each employer will receive a list of those members (name and NI number) who have been sent a letter. A list of employers who should expect to receive a notification can be found in the attached document. Where an Employer does not appear on this list then none of your members are impacted and this is confirmation of your “nil return”. 

Action for employers

You should ensure members approach MyCSP directly to request the value of their Civil Service Pension benefits as at 5 April 2014 or 5 April 2016 if they need this to investigate protection options. MyCSP cannot discuss a member’s tax information with you without the member’s express permission.

Support for members

Pensions and tax guidance sessions are available to members. For Civil Service Employers, you are required to arrange the appropriate pensions and tax guidance sessions for impacted members at Employer cost.

To arrange tax sessions for members you should e mail training@mycsp.co.uk or telephone 01903 835717. MyCSP may be able to arrange a session for members from a number of different employers where demand requires this. Please speak to MyCSP regarding your requirements.

Members can contact MyCSP directly Email: SCU@mycsp.co.uk. Alternatively, members can contact MyCSP directly on the telephone number allocated depending on first letter of surname:

Tel: Surname A to G - 01903 876946

Tel: Surname H to O - 01903 835742

Tel: Surname P to Z - 01903 760191

Please note MyCSP is only able to provide members with details of their Civil Service Pension benefits. Any questions or queries regarding pensions and tax must be directed to HMRC or a registered financial adviser.

Further details can be found on the HMRC website at

https://www.gov.uk/tax-on-your-private-pension/lifetime-allowance

https://www.gov.uk/guidance/pension-schemes-protect-your-lifetime-allowance 

If you have any questions please contact sally.rowles@cabinetoffice.gov.uk or Kevin.Hughes@cabinetoffice.gov.uk