Date posted: 01/11/2011
- All staff responsible for dealing with pension issues
- HR managers
- Payroll providers
- To issue the enclosed notice by the 30 November 2011 to all Civil Service pension scheme members
- To comply with the data requirements of the new legislation
- In November 2010 we advised you of changes to the pension tax regime applicable from tax year 2011/12 (EPN286). In October 2011 we issued EPN309 to tell you about the revised ill health retirement process resulting from the Annual Allowance changes.
- This EPN provides further information about the tax changes, and includes a notice for you to issue to your staff. Full details of the tax charges, and guidance for individuals, are on the HMRC website www.hmrc.gov.uk. Members should refer to the HMRC website and talk to their tax office if they have any queries.
- From 2011/2012 the Annual Allowance has reduced to £50,000. The member notice shows how this is worked out and includes a number of examples.
- The enclosed member notice sets out some possible triggers for an Annual Allowance tax charge. As an employer, you should be aware that one possible trigger is a significant pay increase on promotion. The member notice also gives an example of how a pay increase may affect the Annual Allowance.
New legislative data requirements
- Your Pension Service Centre (PSC) is required by law to issue a pensions savings statement to all members who have breached the Annual Allowance in the relevant tax year.
- Legislation requires employers to provide accurate up to date year end data to their pension scheme administrator. Employers must submit this by the 6 July each year in order for PSCs to meet the statutory timescales for issuing pension saving statements. The legislation allows employers an extra year to supply this data for the first time, but MyCSP are asking that the data is supplied to us by July 2012 so that we will be in a position to issue pension savings statements to members well before October 2013.
- As part of this requirement employers must submit accurate pay figures for all members and specifically for nuvos members for the 9 month period ending 31 December each year. As the pension savings statements must include information on the previous 3 years’ earnings, for the first year only we need you to provide accurate data for those earlier years (if you have not already supplied this). Please refer to the table below for details.
||Employers to provide data by the 6th July 2012 on the
All scheme members - year
end data (financial year)
|nuvos members - cumulative
pay figure (from - to)
||April 2011 - March 2012
||April 10 - Dec 10
||April 09 - Dec 09
||April 08 - Dec 08
||April 07 - Dec 07
- MyCSP Pension Service Centres will issue a Pension Savings Statement to all individuals who have breached the Annual Allowance by 6 October following the end of the relevant tax year. Please note that for the 2011-12 tax year only, schemes are allowed extra time to produce these statements. They are not required to issue the statements until October 2013, but we will update you when we are in position to issue the statements for 2011-12.
- Although it is the member’s responsibility to pay any tax due, in some circumstances they can ask the scheme to pay the tax charge on their behalf in exchange for a permanent reduction to their pension benefits. The enclosed office notice (Annex A) explains how members can apply for this.
- From 6 April 2012 the Lifetime Allowance will reduce to £1.5 million. This will mean potentially higher tax bills for some people retiring with a pension of £75,000 or more (premium or nuvos) or £65,200 (plus lump sum) for members of classic.
- Members have until 5 April 2012 to apply to HMRC for Fixed Protection to keep the current Lifetime Allowance. The member notice gives more details.
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