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Latest News & Updates
Providing members who were in the PPS 1987 with information about their Contingent Decision claim for Opted-Out Service has been paused since the summer of 2024. This was reported in a news item in August 2024.
It was found that the regulations allow a Contingent Decision claim to reinstate Opted Out Service back into the ‘relevant chapter 1 legacy scheme’ and it was determined that for the police scheme, this was the PPS 2006.
The Home Office and HM Treasury have sought legal advice about this issue, and they have shared an update on the following scenario which will allow some Contingent Decision cases to be progressed.
Where a member opts out on or after the closing date (31 March 2015) and does not re-join during the remedy period, in these cases they CAN re-join the PPS 1987.
This position is obtained by following the legislation in the PSPJOA 2022 in the following order:
– Section 5(7) refers the meaning of relevant as to the chapter 1 scheme to being within section 4
– Section 4 (2&3) applies some criteria
– Section 4 (1) applies if a person does not meet the criteria in paras 2&3 as above
Therefore, the view of the Home Office is that section 4(1) can be read to apply the PPS 1987 as the ‘relevant scheme’ to section 5 where a person does not meet the criteria of section 4 (2&3) of having opted out after the closing date and opted back in after 1 April 2022.
Any other scenarios of Contingent Decision claims for Opted Out Service from the PPS 1987 will continue to be paused for the time being.
This will include:
– Members that opted out before 1 April 2015, and
– Members that opted out on or after 1 April 2015 and then opted back in before 1 April 2022.
The pause will enable the Government to review the legislation, to consider next steps for other scenarios and avoids any unintended consequences for members.
There are two deadlines which members will need to adhere to, which are explained in the Remediable pension savings statement factsheet.
R-PSS for years 2015/2016 through to 2022/2023
If a member receives an R-PSS and has a tax charge to pay, they submit this via the digital service within 3 months of receipt of the R-PSS.
Therefore, if R-PSS are issued late, there is no problem because the three months deadline does not occur until they have received the statement.
PSS for 2023/2024
A member must self-assess for a tax charge by 31 January 2025. If a PSS is issued late, the deadline of 31 January 2025 still applies.
HMRC issued guidance on self-assessment without a PSS, which requires a member to use a provisional figure.
It is important to note that because of the increase in annual allowance for 2023/24 it is expected that fewer members to get a PSS this year.
If a member has not received a PSS for 2023/24, they may need to self-assess with a provisional figure, to do that they will need to consider if:-
1. They think they are due a tax charge, (this might be because they usually self-assess for a tax charge)
– They must make a self-assessment using a provisional figure.
– Members can find guidance online about using provisional figures in their Self-Assessment return. This link gives further information on how to provide an estimated figure, there is no additional requirement beyond that a member calculates it to the best of their ability. Provided a member has done so, there will be no penalty from HMRC if the provisional figure used transpires to be incorrect.
– If they want to pay the tax charge themselves (ie rather than use scheme pays) and they under-estimate the tax charge any eventual corrected charge will include interest.
2. They do not think they need to self-assess (either because they have never done or they believe they will not exceed the allowance), but they later receive a statement which means they have a tax charge.
– HMRC have confirmed that while a penalty will issued, the member should appeal and HMRC will accept that they have a reasonable excuse.
HMRC have provided a response to our joint letter about the self-assessment deadline.
They confirm the position for members and what they need to do to make a return. HMRC also confirm that they are not able to bring the 2023/24 year into the Tax Administration Framework and thereby are unable to extend the deadline of 31 January 2025
NPCC and NFCC have jointly written a letter to HMRC to highlight the significant difficulties that both police officers and firefighters have in being able to comply with the requirement by HMRC to deal with self-assessment by 31 January 2025 where they have not received a pension savings statement for 2023/24.
As highlighted in an earlier news item, HMRC have issued an FAQ document to provide clarity to members in this situation to help them understand what they need to do.
A new FAQ has been added to the website:
I’m an immediate choice member with tapered protection, how will my benefits be affected?
Which also contains the question about: What if both my remedy options are for lower benefits?
Annual allowance tax charges for 2023/24 are due to be reported via Self-Assessment to HMRC by 31 January 2025.
Some individuals are experiencing delays in receiving their Pension Savings Statement (PSS) for 2023/24 in time for them to accurately report their annual allowance tax charge.
HMRC have issued an FAQ document to provide clarity to members in this situation to help them understand what they need to do.
The issues reported in August 2024 are still ongoing.
As a reminder, the issue is that the regulations allow a Contingent Decision claim to reinstate Opted Out Service back into the ‘relevant chapter 1 legacy scheme’.
For the police (and fire) pension scheme, the relevant chapter 1 legacy scheme is the 2006 scheme. This means that members cannot opt back into the 1987 scheme.
The legal advice being sought by Home Office is to determine the next steps to get to a position where, a person who opted out because of the discrimination is returned to the position they were in before they opted out, (i.e. reinstatement to the 1987 scheme). It is likely that this will require new legislation.
The pause has been recommended to protect the position of the member. This is because it is unknown whether further unintended tax consequences could be caused if a scheme manager accepts a return into the 2006 scheme, the member retires and ‘crystalises’ their benefits, and the legislation subsequently allows a return to the 1987 scheme. This situation continues to be monitored, and further updates will be provided in due course.
Two more FAQs have been added to the website:
An amendment has been made to a member remedy factsheet: –
Update on immediate choice remediable service statements has been amended to clarify what is meant by a nationally agreed timetable compared to the statutory deadline date. The document gives an update about the remedy timetable after HMRC issued their guidance about offsetting unauthorised payments (see news item 26 September 2024 for more information).
An amendment has been made to a member remedy factsheet: –
Update on immediate choice remediable service statements has been amended to add in an update about the remedy timetable after HMRC issued their guidance about offsetting unauthorised payments (see news item 26 September 2024 for more information).
An updated document has been added to the useful information page: –
An updated list of suggested advisers that members may wish to use for help and support to use the HMRC digital service in relation to remediable pensions tax adjustments.
The advisers on the list are suggestions only, rather than recommendations and there is certainly no obligation for members to use any of them.
A new factsheet has been added to the Member Remedy Documentation page: –
The Member Remedy Factsheet – Remediable Pensions Savings Statements helps members understand when they will receive their remediable pensions savings statement (R-PSS), and what action they need to take.
A new document has been added to the useful information page: –
A list of suggested advisers that members may wish to use for help and support to use the HMRC digital service in relation to remediable pensions tax adjustments.
The advisers on the list are suggestions only, rather than recommendations and there is certainly no obligation for members to use any of them.
On 19 June 2024, we published a news item about the delay to Immediate Choice Remediable Service Statements with regard to members that had previously received an unauthorised payment.
On 26 September 2024 HMRC finally published a newsletter with their guidance with regard to the “offsetting” that is required in the calculations of the unauthorised payments.
This guidance is very long and very technical and NPCC will now be working with the pension administrators to understand whether they have consistent methodologies to enable them to resume processing these cases.
Although the guidance has been released today, it does not mean that administrators will be able to immediately start processing cases and there will be a small further delay whilst we work through this guidance to understand it. A further news item will be provided once this work has been completed and administrators are in a position to calculate these cases.
In September HMRC re-launched their digital service enabling members once again to use the service to calculate their public service pension adjustment and to submit their information to calculate their revised pensions tax position.
HMRC have included a new triage service to help members identify if they need to use the service, along with a new save and return function.
The HMRC digital service can be found online along with a helpful guide of what information you will need before you start and the likely questions you will be asked.
All remedy eligible active members should have received an ABS-RSS or at least a rolled back ABS by 31 August 2024.
Unfortunately, some administrators have been unable to provide this information which may be due to incorrect or missing data from the force or a technical issue.
If this affects you, your administrator or your force will contact you to let you know and advise you of the timescales of when you can expect to receive this information
You DO NOT need to make any decisions or choose your remedy benefits now, this choice is ONLY made when you retire, and your benefits come into payment.
The ABS-RSS is an illustration and for information only.
The ONLY choice that you have to make is whether you wish to settle your contribution adjustment now or not.
You will get the same choice each year until you retire, when the contribution adjustment can be taken from your lump sum.
See the member remedy factsheet on contribution adjustments for more information.
Three more FAQs have been added to the website:
How is the contribution adjustment made up? Which also includes separate sections for a PPS 1987 member and a PPS 2006 member
I’m a PPS 1987 member, why isn’t interest also added to the tax relief I’m due?
Where can I find more information about contribution adjustments?
Three new FAQs have been added to the website:
What is meant by current benefits?
What is meant by alternative benefits?
My Annual Benefit Statement only shows benefits at age 60, how can I make an informed choice?
Four new documents have been added to the website: –
These guides are all about tax and provide a useful reference. There are two introductory guides covering both personal tax and pensions tax and then two more advanced guides building on the introduction documents to show how remedy may have an impact.
An Introduction to Personal Tax – this gives a useful introduction about how income tax works, tax bands and more, it also includes some case studies.
Personal Tax and Remedy – this builds on the information in the Introduction to Personal Tax and illustrates the impact that remedy can have using case studies of contribution adjustments and arrears of pension payments.
An Introduction to Pensions Tax – this gives an introduction to how pensions tax works covering annual allowance and lifetime allowances.
Pensions Tax and Remedy – this builds on the Introduction to Pensions Tax and illustrates the impact that remedy can have on annual allowance and lifetime allowances.
A new FAQ has been added to the website: –
How is the contribution adjustment shown on my ABS-RSS?
Which has two further explanations for PPS 1987 legacy scheme members and PPS 2006 legacy scheme members
A new FAQ section has been added to the website: –
The Annual Benefit Statements section contains some important FAQs
What is an Annual Benefit Statement (ABS)?
What is a rolled back Annual Benefit Statement (ABS)?
What is an Annual Benefit Statement – Remediable Service Statement (ABS-RSS)?
Why is my Annual Benefit Statement (ABS) projected to age 60?
Two new FAQs have been added to the website: –
Am I an Immediate Choice member? This explains who an Immediate Choice member is and also explains eligible decision makers for deceased immediate choice members.
Am I a Deferred Choice member? This explain who a Deferred Choice member is.
There is currently a pause with opted out contingent decisions for a PPS 1987 member who opted out during the remedy period. The pause has been instigated whilst The Home Office and the National Police Chiefs‘ Council (NPCC) work through the issue which is about determining the relevant legacy scheme.
This pause does not affect any other type of contingent decision, nor does it prevent a scheme manager from determining eligibility.
What it does mean is that while the pause is in place, it will not be possible for administrators to provide members with details of the reinstatement of opted out service for any cases where the opt out occurred in the remedy period and the legacy scheme is expected to be the PPS 1987.
The Issue is whether the PSPJO Act as drafted combined with the PPS 1987 regulations achieves the policy intent that the person should be put into the position, they would have been in.
– Section 5 allows an election to be made to treat relevant opted-out service as pensionable under the relevant chapter 1 legacy scheme.
– Section 4 sets out what is a relevant chapter 1 legacy scheme.
The Home Office have raised the issue that as the PSPJO does not change the PPS 1987 regulations of which the rules would prohibit someone joining if they had opted out, which means that the relevant chapter 1 legacy scheme under section 4 is the PPS 2006.
The Home Office is in dialogue with HM Treasury in order to resolve and both are seeking legal advice to understand their powers and what mechanisms can be used to resolve the issue.
NPCC can confirm that the current pause on processing contingent decisions for PPS 1987 opt-outs is not an endorsement of the position that members should return to the PPS 2006 instead, it is because they are working hard for the position to remain that a contingent decision should return the member to the PPS 1987.
On 23 July 2024, HMRC published a public service pension remedy newsletter which explains that the improvements that are being made to the HMRC Digital Service whilst it is “shuttered” have been further delayed.
The newsletter confirms that HMRC expect the developments to the service to now be completed and back online in September 2024.
If you are retiring and you need to make a submission about your pensions tax, then HMRC have provided details about an interim manual process for members.
A new FAQ section has been added to the website: –
The Contributions Adjustments section contains some important FAQs
Why do I have to pay contributions?
How much do I have to pay? Which includes information about what is pensionable pay and taxable pay
Why is the 1987 scheme more expensive?
Is it fair to keep charging interest?
These FAQs support the other material available about contribution adjustments:
The contribution adjustment animation video
The contribution adjustment member remedy factsheet
The illustrative example contribution adjustment member remedy factsheet
A new member remedy factsheet has been added to the website –
Remediable Service Statements a document setting out what the RSS is, when you will receive it and what information you can expect to find in it.
A new member remedy factsheet has been added to the website: –
Illustrative examples contributions adjustments a document setting out some representative illustrations of the likely amounts involved in the contribution adjustment for active members.
A new FAQ has been added to the website: –
When can I expect to receive my lump sum and pension arrears Which includes information about the timing of payments for the correction of benefits owed to you.
Two new useful information documents have ben added to the website: –
How your PPS 2015 scheme benefits build up is a document designed for members to explain how the PPS 2015 scheme works.
How your PPS 2006 or PPS 1987 legacy scheme benefits are calculated is a document for members to explain how their legacy scheme benefits are calculated.
Both of these documents will support information coming later in the year in the Annual Benefit Statement – Remediable Service Statement (ABS-RSS) that will be issued to active and deferred members.
A new member remedy factsheet has been added to the website: –
Unauthorised Payments is a document for members to explain what an unauthorised payment is and when it occurs
Although an update on immediate choice remediable service statements to members has been provided, members need to be aware that the delays being experienced are solely due to a lack of clarity, from both HM Revenue & Customs (HMRC) and HM Treasury (HMT), about some specific technical issues which affect some members.
Since January 2024, the National Police Chiefs’ Council (NPCC) have been meeting weekly with HMT to work through these issues which are now further delayed due to the General Election. NPCC are continuing to progress various options and solutions that will enable the best customer journey.
There are two issues, both of which are about unauthorised payments, they are: –
1) Interest payments that are to be paid on arrears of pension and lump sum.
2) How any new unauthorised payment is calculated when compared to the original retirement.
The delays in getting a resolution to these issues is likely to mean a temporary move away from the published remedy timeline, but as soon as the issue is resolved the timeline will be re-established.
On 4 January 2024, HMRC advised that: –
– Interest paid between the commercial rate and the 8% rate on arrears of pension and lump sum remedy payments would be treated as unauthorised, and
– Interest paid on unauthorised amounts is all unauthorised.
Pension administrators had to wait for a new calculator to determine this commercial rate, as it could not be calculated manually. During this time, NPCC also sought clarity on how unauthorised amounts would be treated.
On 28 April 2024, HMRC amended their previous advice to confirm that: –
– They had removed the need to calculate the commercial rate, and
– Interest paid on authorised amounts is all authorised, and
– Authorised payments will be the interest payment paid on the arrears of annual pensions and, additional lump sum payments where the original lump sum was authorised (i.e. the lump sum was within HMRC limits).
– Interest paid on unauthorised amounts is all unauthorised.
The Interest Payment FAQs on the website have been updated to reflect this information and this was confirmed in a news item published on 5 June 2024
In April 2024, while discussing the interest issue with HMRC, a new issue was discovered with the tax rectification legislation that was laid for remedy.
HMRC confirmed that specific legislation had not been laid that would allow schemes to “offset” the new unauthorised payment against the unauthorised payment that occurred at the original retirement date.
Without a resolution from HMT and HMRC on this issue, it will mean that members will end up paying more in unauthorised payment tax charges than they would have done if they had received these benefits at their original retirement date
This issue only affects immediate choice members who received an unauthorised lump sum from the 1987 scheme when they retired. These members will have paid an unauthorised payment tax charge on some of their lump sum.
– Tapered or unprotected 1987 PPS members who received the maximum scheme lump sum and had an unauthorised payment tax charge.
Administrators will be unable to progress these cases until there is a resolution from HMT and HMRC.
There are certain groups of immediate choice members that will not be affected by these issues: –
– Members that retired as a fully protected member.
– Members that retired and could only commute 2 ¼ times their annual pension.
– Members that chose to keep their lump sum within HMRC limits.
– Members that retired with 2006 PPS membership.
Although administrators are looking to progress these cases where they have all the necessary information from the force, it does not necessarily mean that members will receive their immediate choice remediable service statement imminently.
An amendment has been made to a member remedy factsheet: –
Update on immediate choice remediable service statements to clarify the status of the timeline, the types of tax previously paid and who is not affected.
On 14 June 2024, HMRC published a public service pension remedy newsletter which explains the improvements that are being made to the HMRC Digital Service whilst it is “shuttered”.
The newsletter confirms that HMRC expect to have stage one of the development completed and the service back online by mid July 2024, with further developments due in September 2024.
If you are retiring and you need to make a submission about your pensions tax, then HMRC have provided details about an interim manual process for members.
A new animation video has been added to the website: –
The Contributions Adjustment video is for deferred choice members (active and deferred members) to help explain the contribution adjustment, with more information available in the Contribution Adjustment Member Remedy Factsheet.
New functionality has been added to the website: –
A News Carousel alerting readers to the very latest updates or important news items has been added to the homepage of the website.
A Latest News & Updates page has been added to the website, providing a list of all amendments and new content that has been created since 1 October 2023.
An amendment has been made to five FAQs
Clarification of policy from HM Revenue & Customs and HM Treasury has confirmed that where interest is paid at the 8% rate on arrears of pension and lump sum, the commercial rate of interest does not apply. The following FAQs have been amended to reflect the current position.
What is tax on interest payment? Which includes “Am I affected?”
What is the Scheme Administrator Member Payment?
Interest on arrears of annual pension
An amendment has been made to a useful document: –
Age discrimination project update to make an amendment to the active members affected by remedy.
An amendment has been made to a member remedy factsheet: –
Update on immediate choice remediable service statements to add in about the pre-election period after the General Election was called.
An amendment has been made to a useful document: –
Age discrimination project update to make some minor amendments.
A new useful document and a member remedy factsheet have been added to the website: –
Age discrimination project update is a document setting out an update of the remedy implementation project. It details the challenges that are being faced by the Police Pension Scheme and what is being done to manage this situation.
Update on immediate choice remediable service statements is a document for immediate choice members which provides an update about the provision of their remediable service statements and some of the technical policy issues that are currently being worked through.
A new member remedy factsheet has been added to the website: –
Compensation is a document for members who wish to make a claim for compensation as a result of remedy, it provides some guidance and sets out the process for claims.
Compensation claim form is the claim form that the member needs to complete to make a claim for compensation.
On 11 April 2024 the service to calculate the Public Service Pensions Remedy Adjustment was “shuttered” by HM Revenue and Customs (HMRC) due to an urgent technical issue.
Members are advised that if they need to make a submission to HMRC about their pensions tax within the remedy period that in the first instance they should email publicservicepensionsremedy@hmrc.gov.uk, putting “PSPR submission – police” in the subject line, alternatively they can call 0300 123 1079 and select option 1. HMRC will then be able to advise how to make a manual submission.
A new FAQ has been added to the website: –
How are transfers-in dealt with in the Police Scheme for remedy? Which also includes questions about “I transferred in during the remedy period, how is my transfer dealt with in the legacy scheme?” and “I did not transfer in during the remedy period, but I now want to make a retrospective contingent decision to transfer a benefit into the legacy scheme.
A new member remedy factsheet has been added to the website: –
Remedy timeline a document setting out the timeline for members of when they can expect to receive their remediable service statements.
A new and amended member remedy factsheet have been added to the website: –
Beneficiaries is a document for beneficiaries of members who were affected by remedy and have passed away.
Contingent Decisions the guidance document for members has been updated to include the information about a transfer contingent decision.
11 new FAQs have been added to the website: –
Tax on lump sum FAQs
Lump sum payments Which also provides specific information for each of the police pension schemes.
What is an unauthorised payment? Which also includes an explanation of “what is the unauthorised payments charge?”.
Tax on interest FAQs
Clarification about a late change of policy from HM Revenue and Customs and HM Treasury affecting the 8% interest payments made to underpaid annual pensions and lump sums for immediate choice members.
What is tax on interest payment? Which also includes “Am I affected?”.
What is the commercial rate of interest?
What is the Scheme Administrator Member Payment?
Interest on arrears of annual pension
Interest on authorised amount of additional lump sums
Interest on unauthorised amount of additional lump sums
Individual circumstances FAQs
When will I be asked to make a contingent decision?
Why am I receiving a refund of my Added Pension contributions?
Am I eligible to buy additional service as a contingent decision? Which also includes the relevant eligibility for both the 1987 and the 2006 police pension schemes.
A new member remedy factsheet has been added to the website: –
Added Pension compensation payments is a document for members who paid added pension payments into the 2015 police pension scheme during the remedy and explains what must happen to those payments as part of the rollback to the legacy scheme.
Two new member remedy factsheets have been added to the website: –
Contribution adjustments is a document for all members affected by remedy and outlines some of the key points about their contribution adjustment, such as when to make the adjustment and considerations about tax relief and interest.
Divorce is a document for members that have had a Pension Sharing Order made against their pension during the remedy period.
Three new FAQs have been added to the website: –
How do I calculate my pensions tax charge? Which also includes details for different groups of members “if you retired between 1 April 2015 and 30 September 2023”, “If you retired between 1 October 2023 and 6 October 2024”, “what happens after I’ve made my choice?” and “If you are an active or deferred member”
An amendment has been made to an FAQ on the website: –
How is interest applied? A revised policy position from HM Revenue and Customs and HM Treasury has identified that the 8% interest that is to be applied to underpayments of pension and lump sums may be subject to tax.
A new member remedy factsheet has been added to the website: –
Ill-health retirements is a document for members that retired on ill health grounds within the remedy period, explaining the choices available to them, why an ill health re-assessment may be required and what that means.
An amendment has been made to an FAQ on the website: –
Why do I have to wait until 31 March 2025 to receive my choice? Due to operational issues related to producing the immediate choice remediable service statements, the timetable has been extended for members within the first bullet point from 31 March 2024 to 31 July 2024.
A new animation video has been added to the website: –
Understanding your choices This is a video for immediate choice members to help explain their remediable service statements, which will be issued by 31 March 2025.
An amendment to correct an error has been made to an FAQ on the website: –
Why do I have to wait until 31 March 2025 to receive my choice? The second bullet point was incorrectly showing 1 January 2024 to 31 July 2024, this has been corrected to show 1 January 2024 to 30 November 2024.
A new FAQ has been added to the website: –
A new member remedy factsheet has been added to the website: –
Contingent Decisions is a document for members who wish to make a Contingent Decision claim and provides some guidance and sets out the process for claims.
Contingent Decisions claim form is the claim form that the member needs to complete to make a Contingent Decision claim.
A new FAQ has been added to the website: –
What happens to my 2015 pension if I retire from the 1987 legacy scheme before age 55? This also covers questions about “Compulsory Retirement Ages” and the “Retire and Return” options.