This notice is to provide you with an update on the following aspects of the Pensions Tax:
From 1 September, MyCSP will be issuing Pension Savings Statements (PSS) to members who have:
a) Breached the Annual Allowance in 2015/16; or
b) Earn over £100,000; or
c) Request a statement
The distribution of these statements will be staged by employer, and will be completed by 6 October. The PSS letter will contain;
This topic is complicated for members and the scheme can provide support, whilst being mindful that tax is an individual responsibility and that the scheme cannot provide financial advice.
To support the Pension Savings Statements, an online step-by-step guide has been produced and is available on the Civil Service Pensions website on the FAQs, Help and Support section of the Pensions and Tax page. The product is similar to the Annual Benefit Statement guide, which has received positive feedback from both members and employers.
There are a number of different session options available to the member, and these are set out below along with their costs.
| Group sessions (1:20) | |
|---|---|
| £1,700 | Group session |
| £3,200 | Cost per day (3x Group sessions) |
| Individual sessions | |
| £695 | Tailored 1-1 Session |
| £1,150 | Tailored 1-1 Session with personalised letter and follow up |
We are aware that some smaller employers may have only small numbers of staff affected. Therefore, smaller employers may wish to join with other employers to run group sessions together. Other employers have expressed logistical difficulties with providing sessions for staff overseas, but those employers should be able to arrange sessions via phone or video conference, rather than face-to-face.
To book sessions on behalf of your staff you should complete a Tax Support Enquiry Form which you can find on the Civil Service Pensions website on the Pensions and Tax Help and Support page and send it to Taxsupport@mycsp.co.uk. Alternatively you can call the Tax Support booking number on 01903 835717.
Due to tight deadlines (which are fully set out below), there is only a relatively condensed period to run guidance sessions for them to be fully effective and therefore employers should look to schedule sessions before the end of October if possible.
Members who receive a Pension Savings Statement will need to firstly work out whether they have a tax charge to pay and, if so, to determine how to pay that charge. Members can either pay their tax directly to HMRC via self assessment or can opt for the charge to be taken out of their pension (called “Scheme Pays”). You should be aware that a large proportion of members will not have any tax charge to pay, but will need to engage with the process regardless.
Members may also need to obtain Pension Savings Statements from any other pension arrangements, including from outside of the Civil Service to determine if they have a tax charge to pay.
If members have calculated that they have a tax charge to pay they will need to have made that payment by 31 January 2017 if they have pension inputs in both their pre-2015 pension scheme and alpha or they may be liable for a late payment penalty charge levied by HMRC. This is a HMRC requirement and not a scheme decision. To meet a 31 January deadline, the following timetable is required;
If members only have pension input in a single scheme, eg protected members or alpha-only members, they can use mandatory scheme pays which has a longer deadline of 31 July to finalise.
The deadline for members to complete their self assessment tax return remains as 31 October if paper and 31 January if online.
Many members will not be aware of the different deadlines that apply this year. Previously members had until 31 July to complete the process. It is important staff appreciate the urgency and tighter deadlines which apply this year. A letter will be sent to all members by 26 October to remind them of the deadlines for using Scheme Pays.
We know that it will be important for employers to understand which members will be receiving statements. We have agreed with MyCSP that a list of members who will receive Pension Savings Statements will be sent to each employer (HR Director and/or lead pension contact) at the time of dispatch. This will allow you to target your internal communications and arrange for the relevant member sessions to be arranged.
We will also write again in early October to provide an update on the PSS process and remind employers of the timetable.
It would be helpful if employers provide some core messages to members who are likely to be affected in advance of them receiving Pension Savings Statements. Key messages that you may wish to make are:
If you require any further assistance, please contact Kevin.Hughes@cabinetoffice.gov.uk or Sally.Rowles@cabinetoffice.gov.uk
If you have a question about the distribution of EPNs contact employerpensionnotice@cabinetoffice.gov.uk.
You can find electronic copies of the Employer Pension Guide, all current EPNs and forms on our website.
This notice is for employers and should not be issued to scheme members.
If members have a question about their pension they can find information on this website or by contacting MyCSP.