Guidance

Newsletter on the public service pensions remedy — October 2023

Updated 25 June 2024

The public service pensions remedy may alter the amount members have tested against the annual allowance or the lifetime allowance for the tax years 2015 to 2016 through to 2022 to 2023. This may be as a result of:

• rollback — from 1 October 2023, members of Chapter 1 schemes (public service pension schemes that are not judicial or local government schemes) will be treated as having any pensionable service they built up under a reformed scheme from 1 April 2015 to 31 March 2022, pensioned under their legacy scheme (their pension scheme before the 2015 reforms)
• immediate choice — from 1 October 2023, pensioner members and beneficiaries of deceased members of Chapter 1 schemes will be offered an ‘immediate choice’ to receive new scheme benefits
• options exercise — certain members of the judicial schemes will be given a choice as to whether they are a member of their legacy scheme or their 2015 scheme for the period 1 April 2015 to 31 March 2022
• final salary uplift — all pensioner members with rights built up during the remedy period from 1 April 2015 (2014 for members of the England and Wales pension scheme) will have their benefits calculated on a final salary basis if that is higher

Where the amount members have tested against the annual allowance or the lifetime allowance for the relevant years have changed, scheme administrators may need to revise or newly issue pension savings statements and benefit crystallisation event statements for affected members.

Launch of the calculate your public service pension adjustment service

Today HMRC launched the Calculate your public service pension adjustment service. Members affected by the public service pensions remedy will be able to make a submission through this service, reporting specified information covering the remedy period, about annual allowance and lifetime allowance charges.

The service will allow members to do the following.

For the tax years 2015 to 2016 through to 2018 to 2019:

• calculate any compensation for previously paid annual allowance charges
• make a submission for compensation for previously paid annual allowance or lifetime allowance tax charges

For the tax years 2019 to 2020 through to 2022 to 2023:

• calculate new, reduced or additional annual allowance charges
• make a submission for a correction of annual allowance or lifetime allowance tax charges
• make a new submission of their annual allowance tax charge for 2022 to 2023

It will also be possible for a third party to make a submission:

• on behalf of a deceased member
• where they hold power of attorney or deputyship

At this stage, it will not be possible for a user to save their progress in the service and return to it at a later date. If there is no activity for 15 minutes, the session will time out and the user will need to start from the beginning again. Guidance is available on calculating your public service pension adjustment to help individuals prepare their answers before starting the calculation.

Information needed to complete the calculation

The calculator section of the service is available for anyone to use without signing in to the Government Gateway. To complete the calculation, members may need:

• pension savings statements, including any revised statements issued as a result of the public service pensions remedy
• information submitted on Self Assessment tax returns
• P60s and records of income
• benefit crystallisation event statement
• public sector pension scheme name and Pension Scheme Tax Reference

Once the calculation is complete, members can print or save a PDF copy of the results. However, the results will not be stored for the member to come back to at a later date.

Information needed to complete the submission

The submission process will follow on from the calculation results page. If members do not complete this action and want to make an online submission at a later date, they will need to complete the calculation process again.

To make an online submission, they will need a Government Gateway user ID and password. If members already have a personal tax account, they can use the same ID and password. For anyone who does not currently have either of these, they can create a Government Gateway user ID.

If you have members who are unable to use digital services, once the calculation is complete, this should be saved and printed. Members should telephone either:

• the public service pensions remedy helpline on 0300 123 1079 and select ‘option 1’
• their usual contacts at HMRC if they have bespoke arrangements in place

Deadline for making a submission

Chapter 2 members, Chapter 3 members and Chapter 1 members who are yet to take their benefits (as at 1 October 2023) will generally have until the 31 January 2025 to submit the specified information to HMRC. Chapter 1 members who have retired or those acting on behalf of deceased members will generally have until the 31 January 2027 to submit the specified information to HMRC.

For members using the service to report an annual allowance charge for the 2022 to 2023 tax year, further information on deadlines can be found in Public Service Pensions Remedy newsletter 3.

Members who are affected by the Remedy who have a lifetime allowance charge for the tax year ending 5 April 2023, should still report this on their Self Assessment tax return as normal. If as a result of their remedy, there is an impact on the member’s lifetime allowance charge for the 2022 to 2023 tax year, the member will be able to use the Calculate your public service pension adjustment service to report any adjustments.

What members can expect after making a submission

If a member makes a submission that includes a claim for compensation, HMRC will review the information and send details on to the relevant public service pension scheme. HMRC will not routinely contact members to confirm next steps with compensation, as the next actions are taken by the pension scheme.

If a member makes a submission for the tax years 2019 to 2020, through to 2022 to 2023, that shows additional annual allowance or lifetime allowance tax charges are due, HMRC will be in contact with the member to make arrangements for the tax to be paid. If the submission shows that an overall refund is due for overpaid annual allowance or lifetime allowance tax charges, HMRC will take the necessary action and contact the member to confirm the details.

Further details for members can be found in how the public service pensions remedy affects your pension.

What pension schemes can expect after a member has made a submission

Where HMRC receives a submission that includes a claim for compensation, after reviewing the information, HMRC will upload a spreadsheet with relevant details to the Secure Data Exchange Service (SDES). The spreadsheet will be available for you to download for 6 days before it is deleted. If you need a file to be re-sent, you will need to email [email protected] and put ‘SDES re-send file’ in the subject line.

Where HMRC receives a submission for the tax years 2019 to 2020, through to 2022 to 2023, that shows additional annual allowance or lifetime allowance tax charges are due, if the member indicated on their submission that the pension scheme is paying the charge, they will be instructed to contact you and ensure the tax is paid on the Accounting for Tax Return for the quarter following the quarter in which the member made the election.

If the submission shows that a refund is due for overpaid annual allowance or lifetime allowance tax charges, and the scheme paid the charges originally, the member will be instructed to contact you so that you can request a refund of the overpaid tax. You will need to complete the credit spreadsheet and upload this using SDES. Further information on this process can be found in how the public service pensions remedy affects pension scheme administrators.

Following a review of the information, HMRC will consider the refund request and send a response back to you, by uploading a response file on SDES, confirming the amount of the refund for each member and any repayment interest that has been applied, if applicable.

Public service pensions remedy interactive guidance

Today HMRC also launched the check if you are affected by the public service pensions remedy interactive guidance.

This guidance allows members to check if they’re affected by the remedy by answering a series of questions, including:

• whether they were a member of any public service pension schemes between 1 April 2014 and 31 March 2022
• whether they or their public service pension scheme paid an annual allowance tax charge for any tax year between 6 April 2014 and 5 April 2022
• whether they or their public service pension scheme paid a lifetime allowance charge for any tax year from 6 April 2015
• if they hold or held lifetime allowance protection at any time

The interactive guidance is available for anyone to use, without signing in to the Government Gateway.

GOV.UK guidance for members

Full guidance for members on the public service pensions remedy and what it means for them is now available in how the public service pensions remedy affects your pension. The guidance covers:

• overview of the public service pensions remedy
• information on Chapter 1 schemes and impacts on members
• information on Chapter 2 schemes and impacts on members
• information on Chapter 3 schemes and impacts on members
• annual allowance
• lifetime allowance
• unauthorised payments

GOV.UK guidance for pension scheme administrators

Full guidance for pension scheme administrators on the public service pensions remedy and what it means for you is now available in how the public service pensions remedy affects pension scheme administrators. The guidance covers:

• overview of the public service pensions remedy
• information for Chapter 1 schemes, including benefits
• information for Chapter 2 schemes, including benefits
• information for Chapter 3 schemes, including benefits
• information for private sector schemes
• voluntary contributions
• correction of contributions
• annual allowance
• lifetime allowance
• unauthorised payments
• compensation
• use of the Secure Data Exchange Service