Date posted: 01/01/2009

Audience: This Notice will be of particular interest to:

  • HR Managers and policy teams

Action: If you have not already acted on HR Directors’ Bulletin no 37, please issue the attached notice to senior staff (only)

Timing: Immediate

  1. HR Directors’ Bulletin 37 (issued on 23 September 2008) asked departments to alert senior staff to the fact that people who wish to register pension benefits with HMRC for “transitional protection” need to do so before HMRC’s deadline of 5 April 2009. We understand that some HR practitioners may have missed this message, so we are sending out this reminder. If you have already read and acted on the message in HR Directors’ Bulletin no 37 you should ignore this EPN.
  2. A new pension and tax regime came into effect from 6 April 2006 (“A-day”). The new regime is intended to be far simpler for the vast majority of people. This is achieved by relaxing limits on pension contributions and then assessing pension benefits – at the time that a pension is drawn – against the Lifetime Allowance (LTA). Where pension benefits (in total) exceed the LTA, additional tax is payable – but the LTA is such that only a tiny proportion of people will pay LTA tax. The LTA was set at £1.5m on A-day (equivalent to a pension of around £65,000pa in classic) and will increase to £1.8m by tax year 2010/11. It is currently (tax year 2008/9) £1.65m.
  3. The new regime applies to all members of registered pension schemes. To ease the transition, and to ensure that people who had built up substantial pension benefits before A-day were not subject to retrospective taxation, individuals are able to register their pension benefits with HMRC for transitional protection. There are two forms of transitional protection and it is possible to register for either or both
  • Primary Protection is available only to people whose pension benefits at 5 April 2006 were valued at £1.5m (the value of the LTA at April 2006) or more. Primary Protection provides a personalised LTA.
  • Enhanced Protection protects pension assets accumulated before April 2006 from LTA tax and is mainly intended to safeguard pension pots which benefit from good investment growth. In defined benefit schemes the principle is the same but the test is more complicated.
  1. Employers should be aware that it is an individual’s personal responsibility to manage their tax affairs, including application for registration for transitional protection. However, the Civil Service’s policy has been to provide a reasonable amount of information to senior staff. This included an awareness programme over the winter of 2005/6, comprising seminars for high earners and their employers and supported by information on the Civil Service pensions’ website. We also provided 1:1 briefings to those who thought that they had benefits at, or close to, the LTA.
  2. The deadline for registering with HMRC for transitional protection is 5 April 2009 and we are asking departments to remind their senior staff of this, using the Notice attached. As this will be relevant for only a small proportion of staff, we suggest that you circulate only your SCS (or those paid at equivalent levels). 


This document refers to HR Directors’ Bulletin no 37


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1 January 2009
Last updated:
24 April 2023