EPN592 - Lifetime Allowance (LTA) letters and one-to-one pension support for members

Audience

  • HR managers
  • Pension leads

Summary

We will write to members whose Civil Service pension benefits as at 31 March 2019 were close to or had exceeded the Lifetime Allowance (LTA). This will help members understand their LTA and consider any potential tax implications.

Actions

  • To note the date that we will be issuing LTA letters to members who have breached their LTA or are close to doing so.
  • To note that if a member is attending a one-to-one pension tax session, they should take a copy of their 2019 Pension Savings Statement (PSS) and a copy of their 2019 Annual Benefit Statement (ABS) with them alongside their LTA letter.
  • To note that Civil Service employers must provide employees who have received an LTA letter with an opportunity to attend a one-to-one pension tax session and that it will be at a cost to you (the employer). 
  • To note the information about arranging one-to-one pension tax sessions and where you can find further information.
  • To note that the Scheme Administrator (MyCSP) will provide you with Management Information (MI) to identify which of your employees will receive an LTA letter.
  • To note the support that has been made available to members who receive an LTA letter.  

Timing

  • Immediate

Detail 

1. Lifetime Allowance (LTA) is the limit on the amount of pension benefits an individual can take from all of their registered pension arrangements before they incur a tax charge. If a member exceeds their LTA, they will incur a tax charge when they take their benefits at retirement.

Find out more about LTA.

2. We will have written to all members (by 28 February 2020) whose estimated Civil Service pension benefits exceeded 90% of the LTA as at 31 March 2019. Please note this excludes any contributions they have made to the Civil Service Additional Voluntary Contributions (CSAVC) scheme. The letters will enable members to consider their position regarding their LTA and to seek further advice.

3. The Scheme Administrator will send LTA letters directly to member’s home addresses. Where relevant, and for security reasons, we will send some LTA letters to member’s office addresses. Annexes A and B of this EPN contain a sample copy of the LTA letters for information. The Scheme Administrator will provide your organisation’s pension lead with Management Information (MI) by 28 February 2020 to identify which of your employees will receive an LTA letter. Additionally, the Scheme Administrator will also let you know if none of your members are due to receive an LTA letter.

4. If members need to request the value of their Civil Service pension benefits, to support them in understanding their protection options, they must approach the Scheme Administrator directly by emailing contactcentre@mycsp.co.uk 

5. Please note: the Scheme Administrator cannot discuss a member’s tax information with you, without the member’s permission.

One-to-one pension tax sessions for members

6. The Scheme Administrator can offer group and/or one-to-one pension tax awareness sessions to employees who receive an LTA letter. However, you are able to source your own provider should you prefer to do so. Civil Service employers are required to arrange these sessions themselves, at their own cost. One-to-one pension tax sessions can take place at your premises, or externally. For more information about the cost of one-to-one tax sessions, and how to book them please refer to Annex C or contact TaxSupport@mycsp.co.uk .

7. If you have already provided an employee with a one-to-one pension tax session following their receipt of a 2019 PSS, you are not required to provide them with another one.

8. Members who attend a one-to-one pension tax session should take their Pension Saving Statement and Annual Benefit Statement with them. They can request a copy by emailing pss@mycsp.co.uk.

Support for members

9. If members have a query about their Civil Service pension benefits, they should be signposted to the dedicated web page here:

https://www.civilservicepensionscheme.org.uk/members/lifetime-allowance/

If after visiting the website members still have queries, please advise them to contact the Scheme Administrator by either:

10. Members must direct their individual pension tax queries to either HMRC or a registered financial adviser. Neither the Scheme Manager (Cabinet Office) nor the Scheme Administrator can respond to individual tax queries.

11. Members can find more information about LTA on the GOV.UK website by visiting this web page:

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

Contacts

If you have a question about the distribution of EPNs or you need to receive them in a different format please contact:

EPN@MyCSP.co.uk

You can find electronic copies of the Employers’ Pension Guide, all current EPNs and forms on the employers pages.

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 the member's pages.

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