AA FAQs

How do I obtain the value of my pension as at 5 April 2016 which is needed to apply for Individual/Fixed Protection 2016 from HMRC?

Please either telephone or e-mail the contact centre to request this information. 

What factors can lead to a breach in the allowance?

Here are some examples of factors that can contribute to a breach in the allowance:

  • if you earn a relatively high salary;
  • if you’ve had a significant increase in pensionable pay;
  • if you’ve bought a lot of Added Pension;
  • if you’ve combined (aggregated) two separate periods of membership in the Civil Service Pensions arrangements;
  • if you’ve had a club transfer into the Civil Service Pension arrangement. See Public Sector Transfer Club for more information on club transfers.

What period does this statement refer to?

The growth in your pension savings is compared against the Annual Allowance, usually over the period of a year. This period is called a Pension Input Period.

The 2015 to 2016 tax year will be split into two pension input periods for the purpose of Annual Allowance. All Pension Input Periods that were open on 8 July 2015 ended that day and the next Pension Input Period covers the period from 9 July 2015 to 5 April 2016. This is a transitional arrangement required by HMRC, in order to align Pension Input Periods with the tax year.

The growth in your pension savings is shown separately on the enclosed statement(s) for each of these periods. These transitional rules have been introduced for this year to protect savers who have made savings before the summer Budget of 2015 on the assumption that their Pension Input Period would not change

How do you work out the growth in pension savings?

The growth of your pension savings is not equal to the contributions that you and/or you employer have made.

The growth of your pension savings within a Pension Input Period in each of the defined benefit schemes you are a member of (PCSPS, which includes classic, premium, classic plus and nuvos sections; and CSOPS, also known as alpha) is calculated as follows:

Step 1. We determine the benefits you had built up at the end of the previous Pension Input Period and multiply this by a factor defined by HMRC (currently 16).

Step 2. Any automatic lump sum that you may be eligible for is added to the amount calculated in Step 1.

Step 3. We adjust the total amount in line with inflation. This is the value at the start of the Pension Input Period. See below for the inflation amount used.

Step 4. We determine the benefits you had built up at the end of the current Pension Input Period and multiply it by the same factor as used in Step 1.

Step 5. We add any automatic lump sum that you may be eligible for to the amount calculated in Step 4.

Step 6. We deduct the value in Step 3 from the value in Step 5. This is your Pension Input Amount.

We follow these steps for each of the schemes (PCSPS and/or CSOPS) which you have benefits in. The combined Pension Input Amount is compared against the Annual Allowance to determine if you have breached in any given Pension Input Period.

Any contributions you and your employer have paid into other defined contribution pension arrangements (e.g. Civil Service AVC Schemes, the partnership pension account, a stakeholder or personal pension outside the Civil Service Pensions arrangements) are not included on a Pension Savings Statement from MyCSP.

What inflation adjustment is used?

The inflation measure that is normally used to adjust the value of your pension savings is the change in the Consumer Prices Index (CPI) over the year to September before the start of the tax year.

So, for 2014/15, we used the increase in the CPI from September 2012 to September 2013 (2.7%).

For the transitional period to 5 April 2016, HMRC have stated that the adjustment to be used is 2.5% for each Pension Input Period, instead of the change in CPI.

What do I have to do now?

You need to establish whether you have a tax charge to pay.

Even if your pension savings for the year are over the Annual Allowance, you still may not have to pay a tax charge, if, for example, you didn’t use up your full Annual Allowance in the previous three Pension Input Periods. You can use any unused Annual Allowance from the three years prior to the current tax year to offset against any taxable amount. This is called Carry Forward and more information on this is available at www.hmrc.gov.uk/pensionschemes/calc-aa.htm

To determine if you have any unused Carry Forward allowance available from previous years, you must take into account all other pension savings you might have outside of the Civil Service Pensions arrangements. We include information on the calculated Pension Input Amounts for your Civil Service Pension for previous Pension Input Periods on your Pension Savings Statement.

The enclosed statement only provides information about your Civil Service defined benefit scheme benefits, including any Added Pension or Added Years that you may have bought, any transferred in benefits and any aggregated service. It doesn’t include any Civil Service AVCs, Partnership scheme benefits or any other pension arrangements you may have. You will need to contact the provider of any such schemes to get the information you need.

What information are the calculations based on?

The figures on your Pension Savings Statement have been calculated using the pension data provided by your employer. It is your employer’s responsibility to ensure the data held by MyCSP is correct and up to date.

If you think the data held by MyCSP may be wrong, please put your concerns in writing to MyCSP (by email or post, marking as for the attention of the Scheme Compliance Unit) before declaring any tax charge to HM Revenue & Customs. MyCSP can then check your data and provide a revised statement if necessary.

How do I calculate whether I have any tax to pay?

Tax is your individual responsibility. Information on how to calculate whether there is any tax to pay is available at www.hmrc.gov.uk/tools/pension-allowance/index.htm including an online calculator.

If you are liable to pay an Annual Allowance tax charge, you should follow HMRC guidelines for calculating, declaring and paying any tax due.

I have calculated that I have a tax charge to pay - what do I need to do?

If you have a tax charge to pay for 2015/16 and have already filed a Self-Assessment tax return for that year, you must amend it. Refer to the HMRC website www.hmrc.gov.uk/sa/index.htm on how to do this.

If you have a tax charge to pay for 2015/16 and have not yet filed your Self-Assessment tax return for that year, you must include it.

If you have a tax charge for 2015/16 and have not completed a Self-Assessment tax return before, you must register for self-assessment and declare your tax charge by completing the tax return.

If you have a tax charge to pay, you can pay it directly to HM Revenue & Customs using their self-service facility. You should note the deadlines for payment. Information on Self-Assessment is available at www.hmrc.gov.uk/sa/index.htm

Alternatively, if your tax charge is greater than £2000, you can request that the scheme pay the tax charge on your behalf in exchange for a permanent reduction in your pension benefits. This is called Scheme Pays.

How do I use the Scheme Pays option?

Complete a Scheme Pays Quote form. This should be completed and returned once you have established the Annual Allowance tax charge that relates to your Civil Service Pensions Scheme benefits.

MyCSP will consider your eligibility for Scheme Pays and, if appropriate, will provide an estimate showing the permanent reduction in your pension as a result of the scheme paying the tax charge on your behalf. You then decide if you want to go ahead with the Scheme Pays option and advise MyCSP. The debit will be recorded and will be factored into any future annual benefit statements.

Please note: the Scheme Pays option is only available if you are still an active member of the scheme and are not in receipt of your Civil Service Pension. For more information about Scheme Pays, please see the Pension Savings Statement guide.

Is there a time limit to using the Scheme Pays option?

Yes. You must apply for Scheme Pays by 31 July in the year following that in which the Annual Allowance tax charge becomes due. So, for tax year 2015/16 you must apply for Scheme Pays by 31 July 2017.

I am using Scheme Pays and my Self-Assessment form asks for the scheme’s PSTR. What is this?

The Pension Scheme Tax Reference (PSTR) is different for each scheme. If you are using Scheme Pays for both schemes, then you will need to inform HMRC of both PSTRs.

  • For the Principal Civil Service Pension Scheme, it is 00329087RB;
  • For the Civil Servants and Others Pension Scheme (alpha), it is 00818653RF.

How do I tell HMRC I have used Scheme Pays?

You should complete the relevant sections on the self-assessment tax return, currently boxes 8, 9 and 10 in the Pension savings tax charges and taxable lump sums from overseas pension schemes section.

If you don’t complete these boxes on your Self-Assessment tax return, HM Revenue & Customs will not know that you have used Scheme Pays.

Where can I find more Information?

For more details on Annual Allowance, Scheme Pays, calculating and paying tax charges, a calculator and Frequently Asked Questions, please see the HM Revenue & Customs website:

www.hmrc.gov.uk/pensionschemes/calc-aa.htm

or www.hmrc.gov.uk/tools/pension-allowance/calculator.htm

There is a Pension Savings Statement guide on the Civil Service Pensions website www.civilservicepensionscheme.org.uk/members/pensions-and-tax/ that gives further details regarding the calculation and information provided in the statement.

Who do I contact if I have a question about my Pension Savings Statement?

If you have any questions which are not answered in this letter or the guide available on the Civil Service Pensions website, please contact the Scheme Compliance Unit at MyCSP on the numbers listed below (9am-5pm Mon-Fri excluding Bank Holidays). Please call the number below that corresponds to the first letter of your surname.

A – C: 01903 876 946
D – G: 01903 835 731
H – J: 01903 760 075
K – N: 01903 835 742
O – Q: 01903 760 317
R – T: 01903 760 191
U – Z: 01903 876 929

Alternatively, you can contact the Scheme Compliance Unit by emailing SCU@mycsp.co.uk or by post to the address on the front on this letter. Please include your name, date of birth and our ref from page 1 in any correspondence to enable us to identify you and progress your query.

What is Annual Allowance?

The Annual Allowance is set by HM Revenue & Customs and is the maximum amount of pension savings you can earn in any one year that benefits from tax relief. If the growth in your pension savings in any one year is more than the Annual Allowance, you may be liable to pay tax on the amount that is over the allowance.

If you have any other pension savings outside of the Civil Service Pensions arrangements, these also contribute to using up your Annual Allowance.

More information can be found on gov.uk www.gov.uk/tax-on-your-private-pension/annual-allowance

How many Pension Savings Statements should I have?

The number of statements you have received is dependent on your scheme membership:

  • if you are a member of PCSPS (classic, classic plus, premium or nuvos), then you will have received a single PCSPS statement;
  • if you are a member of CSOPS (alpha) and have never been a member of PCSPS then you will have received a single CSOPS statement;
  • if you have been a member of PCSPS and have moved into CSOPS then you will have received a separate Pension Savings Statement for PCSPS and CSOPS. Even if you have not exceeded the Annual Allowance in either scheme individually, we check to see if you have breached the limit in both schemes combined and issue a Pension Savings Statement for each scheme separately.