The period over which the growth in an individual’s pension is measured for assessment against the Annual Allowance (AA) is called the Pension Input Period (PIP).   The existing PIP for the Teachers’ Pension Scheme runs from 1 April to 31 March, in line with the financial year.

Legislation will change the PIP for all pension schemes to be in line with tax years.  The tax year 2015/16 will be the transitional year in which this will happen.  During 2015/16, this will mean that for Teachers’ Pensions, we’ll need to measure the pension accrual for all members over the period from 1 April 2015 to 5 April 2016.

 Currently you provide us with annual data to 31 March each year.  Changing the PIP to align with tax years will mean that we’ll now need to collect information up to 5 April.

If you currently provide data to us via the Annual Service Return, the additional information will need to be provided in the usual format through the Annual Service Return template.  An additional line of service for the period from 1 April to 5 April 2016 should now be included, as well as the usual service line for the year ending 31 March 2016. An example of this is shown on our website here (PDF, 258 KB) (This link opens in a new window).

If you currently provide data to TPS through Monthly Data Collection, the additional information will need to be provided to TPS as an additional service line (covering 1 April to 5 April) on the submission made in May. May’s submission will also need a separate service line to cover the period of 6 April to 30 April.

We appreciate the challenge this may present and that it may not be possible for some employers to extract this information automatically from their payroll systems, or at least not in the timescales available for 2015/16.  We’ve, therefore, worked with the Department for Education to investigate whether an alternative approach would be possible for 2015/16, where accurate information is not available.  As a result, for the 2015/16 year only we’ll be able to accept estimated information in respect of the additional five days of service.  Employers should therefore provide estimated information if it is not possible for them to provide actual information.

If, however, information is only provided by an employer for the year to 31 March 2016, we’ll calculate a member’s pension accrual based on this service only.  The Pension Saving Statement (PSS) issued to members will clearly show the service information used in the calculation of benefits.  This proposed approach will be communicated to members as part of the PSS, which will ask that they check the service and salary details carefully.  If members require an accurate calculation of their pension accrual for taxation purposes, we’ll advise that they need to ask you as their employer to provide the additional information to us if they’ve not already done so.  We’ll then be able to issue a PSS based on service to 5 April 2016.

For 2016/17 onwards, there will be no discretion to provide estimates and in line with the requirements set out in legislation we will need accurate salary and service information to 5 April.  This may require you to work with your payroll provider to enable the information to be provided.  If payroll system changes are needed and you’re not already providing information through Monthly Data Collection, it may be worthwhile considering moving to Monthly Data Collection at the same time.  Please contact us if you would like to know what this would involve.

As the information from the annual service return is needed for us to be able to provide members with a PSS, we’d like to remind you of the importance of the 6 July deadline for submitting your annual return.

We’ll keep you up to date with any further information in relation to the Annual Allowance and the forthcoming changes through our website.