Guidance

Newsletter on the public service pensions remedy — November 2022

Published 25 November 2022

1. Draft regulations

In 2015, all main public service pensions were reformed. These reforms included ‘transitional protection’ for people closer to retirement. In 2018, the Court of Appeal ruled that this directly discriminated against some younger pension scheme members. The government confirmed that the difference in treatment would be remedied across all of the public service pension schemes. A response to the ruling from HM Treasury can be found in written statement HCWS1725 on the UK Parliament website.

Draft regulations and guidance have now been published and views are now sought in a technical consultation on the public service pensions remedy. These draft regulations set out the tax treatment of the changes arising from the remedy in Part 1 of the Public Service Pensions and Judicial Offices Act 2022. They aim to smooth the implementation of that remedy.

The consultation closes at 11.59pm on 6 January 2023. Responses can be sent to pensions.policy@hmrc.gov.uk.

There will be further publications of draft regulations covering different topics.

2. Draft regulations — accompanying guidance

We have published guidance to support the draft regulations and explain in more detail the requirements and processes that you, as pension scheme administrator, will need to implement and follow.

This covers such things as:

• changes to Annual Allowance and Lifetime Allowance
• changes to Lifetime Allowance protections
• issuing of remedial service statements
• operation of Scheme Pays
• corrections of contributions going forwards
• accrual that moves to the legacy scheme and what this means for Benefit Crystallisation Event (BCE) calculations
• accrual that remains with the reform scheme and what this means for BCE calculations
• top up payments — authorisation and taxation rules
• tax treatment of compensation payments
• transfers

This is currently the only guidance available on the draft regulations and accompanying processes. If you have any comments or queries on the guidance or processes as set out, contact us at: publicservicepensionsremedy@hmrc.gov.uk.

3. Member queries

We are currently unable to provide any information in addition to the draft regulations and guidance regarding the public service pensions remedy to members. If any of your members contact HMRC with queries regarding their position in relation to the public service pensions remedy, we will direct them back to yourselves as pension scheme administrator.

At a later date we will publish specific guidance for affected members, for the different actions they may need to take.

4. Future updates

We will aim to publish a bespoke public service pensions remedy newsletter when there are any further significant updates to regulations, guidance or processes.

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