EPN625-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 2020 were close to or had exceeded the Lifetime Allowance (LTA). This will help members to understand their LTA and to 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 the Scheme Administrator (MyCSP) will provide you with Management Information (MI) to identify which of your employees will receive an LTA letter.
  • To note that Civil Service employers can choose how to best support employees who have received an LTA letter.
  • To note that MyCSP can provide one-to-one pension tax sessions at a cost to you the employer; however they are not mandatory.
  • To note the information about arranging pension tax sessions and where you can find further information.
  • To note that if a member is attending a one-to-one pension tax session, they should have a copy of their 2020 Pension Savings Statement (PSS) and a copy of their 2020 Annual Benefit Statement (ABS) to hand alongside their LTA letter.
  • To note the support that has been made available to members who receive an LTA letter.  

Timing

  • Immediate

Detail

1. 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. You can find more information about LTA here.

2. We will have written to all members (by 31 March 2021) whose estimated Civil Service pension benefits exceeded 90% of the LTA as at 31 March 2020. 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 email some LTA letters to employers to then pass on to the member. Annex A of this EPN contains a sample copy of the LTA letter for information. The Scheme Administrator will provide your organisation’s pension lead with Management Information (MI) by 31 March 2021 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.

Pension tax sessions for members

6. The Scheme Administrator can offer 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. In the past, Civil Service employers were required to support members by arranging and paying for these sessions themselves. This year it has been decided that employers should determine how to best support members. Tax support sessions can be delivered via Microsoft Teams or telephone. For more information about the cost of tax sessions, and how to book them please refer to Annex B or contact TaxSupport@mycsp.co.uk.

7. I you decide to provide a tax support session for your members, they should have a copy of their PSS and ABS with them during the session. They can request a copy by emailing pss@mycsp.co.uk.

Support for members

8. If members have a query about their Civil Service pension benefits, they should be signposted to the dedicated Lifetime Allowance web page.

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

9. 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.

10. 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 would like to receive them in a different format, please contact EPN@MyCSP.co.uk.

You can find electronic copies of the Employer Pension Guide, all current EPNs and forms in the Employer section of the Civil Service Pensions website.

This notice is for employers and should not be issued to scheme members.

Members can find information about their pension by visiting the member's section.

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