Annual allowance (AA) is the amount by which a member’s pension, their Pension Input Amount (PIA), can grow in a Pension Input Period (PIP). All members are assessed annually and where the growth of a member’s PIA in a PIP is greater than the AA available to the member, they may be subject to a tax charge on the excess. Any charges along with payment options are provided to members via a Pension Saving Statement (PSS).
As a result of Transitional Protection, benefits accrued in the remedy period (1 April 2015 to 31 March 2022) have been ‘rolled back’ from career average to final salary on 1 October 2023. Due to rollback, the deadline to provide those affected with a PSS for the 2022/23 tax year PIP has been extended.
Pension Savings Statements
If you’re a protected member, you’ll have received your 2022/23 tax year PSS (if you’re due one) as usual by 6 October 2023. This is because when rollback occurred on 1 October 2023, your service didn't change as you were already in the final salary scheme for the remedy period. If, at retirement you make an alternative choice for remedy period service, this could affect your AA position in the year you make your choice.
If you’re a tapered or unprotected member, you’ll receive your PSS by 6 October 2024 on account of rollback.
A remediable rPSS covering the remedy period tax years will be issued to affected active and deferred members, if the PIAs change for remedy period years. Retired members affected will receive their rPSS six months after their Immediate Choice election or six months after the end of the election period if no choice is made. You’ll need to reassess your Annual Allowance position.
If, as a result of the PIA amendments relating to the remedy period you owe an additional AA charge for a relevant tax year (2019/20, 2020/21, 2021/22 and 2022/23), and don’t wish to pay this yourself, you can request that we pay this via mandatory ‘Scheme Pays’.
For more information about Annual Allowance, please visit the bespoke pages.
For further information about Remedial Pension Savings Statements please read our Remedial Pension Savings Statement factsheet (PDF, 146 KB) (This link opens in a new window).
HMRC's Digital Service
A small number of members’ pension tax position in remedy period years may be affected due to ‘rollback’.
HMRC has introduced a calculator and interactive guidance, to help you identify whether you’re affected and need to take any action. If you were:
- a ‘protected member’ joining the career average scheme for the first time from 1 April 2022, you’ll not have your service ‘rolled back’ and your previous Pension Input Amounts won’t be revisited. However, your Annual Allowance may be affected in the tax year that you make your choice if you choose career average benefits for the remedy period, following receipt of your ‘Remediable Service Statement’
- a ‘tapered’ and ‘unprotected’ member, you’ll likely see a change in your Pension Input Amounts for some or all of the remedy period tax years.
If you’ve any new annual allowance charges or changes to your annual allowance charges, due to rollback, you can use the service to calculate:
- If you’ve previously overpaid annual allowance charges for tax years 2019/20 to 2021/22, and how to apply for a refund
- If you’ve previously overpaid annual allowance charges for tax years 2015/16 to 2018/19, and how to apply for compensation
- If you’ve underpaid annual allowance charges for tax years 2019/20 to 2021/22, and how to make payment
Scheme Pays
Any adjustment to Scheme Pays elections for remedy period years will need to be made via the HMRC - Calculate your public service pension adjustment (This link opens in a new window).
If you didn’t have a Scheme Pays election, but because of the remedy are now subject to one, you’ll have until 6 July 2025 (or 6 July 2027 if you’re a retired member) to submit a request. You can still elect for scheme pays after these deadlines; however, this will be paid under the Scheme’s voluntary scheme pays facility.
For more information about scheme pays, please read our factsheet (PDF, 92 KB) (This link opens in a new window).
HMRC submission deadlines
The Legislative deadline for the scheme to issue a Remediable Pension Saving Statement (rPSS) covering the remedy period to those eligible members who require one is 6 October 2024. Unfortunately, due to the complexities in the development of these, all statements will not be issued by this deadline and will continue into 2025.
The affected schemes have been in discussion with HMRC about this, and the following will apply for submitting Annual Allowance charges to HMRC.
Members who receive their rPSS by 31 October 2024 will have until 31 January 2025 to report their Annual Allowance charges.
Members who receive their rPSS on or after 1 November 2024 will have three months from the date their rPSS was issued to report their Annual Allowance charges.
Once you receive your Remediable Pension Savings Statements, you’ll be able to input your previous and revised Pension Input Amount into HMRC’s calculator (This link opens in a new window) for the relevant tax years in the remedy period.
Last Updated:
05/12/2024 14:41