McCloud Judgment and Remedy FAQs - Remedy PSS

Why am I receiving this Remedy Pension Savings Statement (Remedy PSS)?

Our records show that you are impacted by 2015 Remedy (The McCloud Judgment and 2015 Remedy).

As a result, your benefits were ‘rolled back’ (reverted) into your Legacy scheme (Classic, Classic Plus, Premium or Nuvos) for the Remedy Period (1 April 2015 – 31 March 2022) and your Pension Input Amounts (PIAs) have been recalculated during that period. They have also been calculated for 2022/2023.

Schemes are required to provide members with Pension Input Amounts (PIAs), which show the increase or growth in the value of benefits over a set period.

How have my Pension Input Amounts (PIAs) changed?

Your revised PIA(s) have been recalculated based on Legacy service up to 31/03/2022 and alpha service from 01/04/2022.

What action do I need to take?

All members need to calculate whether a charge is due, and whether any past charges have changed. You can do this using the HMRC Calculate your public service pension adjustment service.

If there is a tax charge to pay, you must also use this Service to report it by submitting your information. If there is no charge to pay and you have not previously paid an Annual Allowance charge, there is no further action to be taken.

What information should I have at hand to use the HMRC Calculate Your Public Service Adjustment Service?

It is important for you to read the 'Before you start' section within the HMRC guidance of the Calculate your public service pension adjustment homepage as this details all the information you require to use it. HMRC may ask you to input additional pension and/or income information from other sources. We won't be able to help you with this as it is personal to you.  For example, you may need to contact your employer for P60s for the 2015/16 to 2022/23 tax years if you do not have this information at hand.

Can you tell me more about Annual Allowance charges and Scheme Pays?

If you have a new or additional annual allowance tax charge to pay as a result of the 2015 Remedy between and including the tax years 2019 to 2020 and 2022 to 2023, you can elect the scheme to pay the charge on a mandatory basis by using Scheme Pays. You can do this even if:

• the pension input amount for the tax year does not exceed £40,000
• the tax is not £2,000 or more
• you have crystallised all of your scheme benefits before you make the scheme pays election

For the Scheme Pays election to be made on a mandatory basis, you must notify Civil Service Pensions (NI) by either:

• 8 July 2025 — for active or deferred members
• 8 July 2027 — for pensioners

If you owe a tax charge and have not already made your election for Scheme Pays to Civil Service Pensions (NI), you can agree to make that election using the HMRC digital service and HMRC will pass this information onto Civil Service Pensions (NI) so we can pay the charge. This removes the need for you to make that election. You will only be given this option if you’re making your own HMRC submission or acting as a power of attorney or deputy for a member.

Note if Civil Service Pensions (NI) pay your tax charge through Scheme Pays, a Scheme Pays deduction will be applied to your pension benefits.

Have I got unused Annual Allowance?

Unused Annual Allowance is the difference between the Pension Input Amount and Annual Allowance limit. You may not have to pay a tax charge if you have enough unused Annual Allowance from the previous three Pension Input Periods. An example of how unused Annual Allowance is calculated within a tax year can be found below:

2022/23 Tax Year
Your Annual Allowance	£40,000
Your Pension Input Amount	(minus) £15,000
Your Unused Annual Allowance	= £25,000

Previous Pension Input Periods and Amounts for your NICS pension benefits are shown on your Remedy PSS. Your Statement will show you how much Annual Allowance was used in the previous  years in relation to your NICS Pension Schemes savings. 

Unused Annual Allowance from the previous three Pension Input Periods is called ‘carry forward’. If you have unused Annual Allowance from more than one year, you need to use them in order of the earliest to most recent.

Can I retire before my tax charges have been amended?

Yes, you can still retire before you have acted regarding any outstanding tax charges. You can still use Scheme Pays after you have retired, for any additional tax charge, and any necessary adjustments to your pension can be made after you have applied for this.

Will my choice at retirement impact the recalculated PIA?

No, your PIA will only be recalculated once. At retirement you will be given two options in respect of your Remedy service, and we will calculate your PIA for the year of your retirement based on which option calculates the lower PIA, irrespective of the option you take. If you chose the Legacy scheme, your PIA would remain unchanged.

CSP(NI) confirmed that my previous PSS was issued in error so why have I received a revised PSS?

Previous PSSs were issued based on the data held at the time. You may have queried some of the data that caused you to breach previously, and this has now been corrected. Our records do, however, still show that you received a PSS during the Remedy Period.

If you did not have a tax charge previously and this remains the case, there is no action to be taken.

What happens if I have overpaid tax charges?

You could have overpaid a tax charge if you previously paid an Annual Allowance Tax Charge in the Remedy Period and, in the same year:

1. The tax charge now due is less
2. You no longer exceed the Annual Allowance limit and there is no longer a charge due

If you’ve worked out you have overpaid tax charges in the Remedy Period, you should submit your inputs through the Calculate Your Public Service Pension Adjustment Service to report it to HMRC.

HMRC will review submissions reported via this Service. If there is an adjustment made for the years between 2015/2016 and 2018/2019, it will be checked by HMRC and they will then forward the details to Civil Service Pensions (NI). If the adjustment is for the years between 2019/2020 and 2022/2023, it will be checked and processed by HMRC.

HMRC will assess your pension inputs and provide information to the scheme regarding any compensation due.

What happens to the tax charges already paid?

These will be offset against any new tax charge. If you no longer have a charge, you could be due compensation and the HMRC will inform you if this is the case.

Out of scope years (now called Compensation Period) - 2015-2016, 2016-2017, 2017-2018, 2018-2019

• Where Annual Allowance Tax Charge (AATC) was paid via Scheme Pays (SP), schemes will make indirect compensation available to members by adjusting how much of the member's rights are to account for their Annual Allowance Tax Charge (AATC) through Scheme Pays (making a pension adjustment accordingly).
• Where the Annual Allowance Tax Charge (AATC) was paid by a member direct to HMRC, the Scheme will return this sum (plus interest) to the member as compensation through a payment back to the member. The compensation and interest are not taxable.
• Schemes should not claim back the tax from the HMRC for out of scope years.
• After review of the member's inputs, HMRC will provide details via SDES on how to apportion owed compensation to particular out of scope remedy years so that the correct actuarial factors are applied and how to establish the overall "netted" off position for the member across all out of scope years.

In scope years (now called Tax Administration Framework) - 2019-2020, 2020-2021, 2021-2022

• Where originally paid directly to HMRC, you will need to claim back from HMRC and HMRC will refund it (this is known as direct compensation).
• Where originally paid via Scheme Pays, your Scheme Administrator will adjust the amount of pension paid to you.

What happens if I owe additional tax charges?

Once you have entered your Pension Input Amounts (PIAs) using the HMRC Calculate Your Public Service Pension Adjustment Service, it will show you if there are any tax charges relating to the period. If there are, you must ensure that you submit your inputs to report this to HMRC.

You should then follow HMRC guidelines for paying any tax due.

You can pay your Annual Allowance Tax Charge (AATC) directly to HMRC or you can elect to use Scheme Pays.

I have previous public sector service from a club transfer in, that means I am impacted by Remedy, how will my Pension Input Amounts be calculated?

There are many scenarios, and some will require further data to be provided from the ceding scheme, in particular where the transfer included new scheme remediable service from the ceding scheme (we will use data based on Legacy only in the Remedy Period).

If we have all the data we need, then we will treat any remediable service in the Principal Civil Service Pension Scheme (NI) as Legacy and any transferred in remediable service as Legacy for PIA purposes. However, if there are elements in the transfer relating to Member Voluntary Contributions (MVCs) (e.g. added pension) then these will have to adopt the same treatment as alpha added pension, i.e., the value remains there for PIA purposes.

Why do I have pension input amounts for tax years prior to 2021/2022 in alpha?

These relate specifically to transfers in. The rights from these remain in alpha (and count in the years following) until the point of conversion which will take place in the future, at a date which is yet to be determined.

Once my transfer in has been converted to PCSPS(NI) will my PIA need recalculating again?

No, but the converted benefits will count in subsequent PIAs as Legacy.

If no, what if it would have reduced my tax charge as PIA is now lower once converted?

It wouldn’t have, as the conversion is not retrospective.

If I have data changes that cause previous PIA to be recalculated after the conversion, what basis will my PIA be re-calculated on?

Your revised Remedy PIA was based on the data held at the time and the latest PIA supersedes this.

Will the Remedy PSS include information about the latest tax year?

If you are due to receive a Pension Savings Statement for the 2023/2024 tax year, this will be produced separately, but will be issued alongside your Remedy Pension Savings Statement (Remedy PSS) by 6 October 2024.

What you will need to do in relation to your 2023/2024 PSS is different to your Remedy PSS, and you can find out more about this by visiting the Pension Savings Statement page.

Why are some Pension Input Periods (PIPs) in my Remedy PSS Calendar years and other tax years?

You may notice that some years prior to 2015 have Pension Input Periods (PIPs) are based on the calendar year and that for 2015/16 there are figures for two Pension Input Amounts (PIAs) listed for two PIPs. This is because HMRC changed Pension Input Periods to match the tax year (6 April to 5 April) from 6 April 2016 onwards. Prior to this change, Pension Input Periods counted toward the tax year in which they ended. For example, the Pension Input Period running from 1 January 2013 - 31 December 2013 ended in tax year 2013/14 and so counts toward that tax year.

When you come to use the HMRC calculator, you don’t need to worry about what time period the Pension Input Period was, the left hand ‘Year’ column corresponds with the fields you’ll be asked to input the figures in that row into the calculator . For the 2015/2016 year, you’ll notice figures for two Pension Input Periods and you’ll find that the HMRC calculator has two corresponding fields to enable you to input both Pension Input Amount figures provided.

Why have I not received my Remedy Pension Savings Statement (Remedy PSS)?

There has been a delay in issuing a small number of statements due to additional complexities.

We are working hard to rectify the situation and provide a Remedy PSS as soon as possible. We apologise for any inconvenience this may cause.

We will write to members who are affected by any delay in November 2024.  The deadline for members to use the HMRC calculator and, if necessary, upload their information, is 31st January 2025.  If you receive your RPSS on or after 1st November 2024, the deadline will be extended to three months after the issue date of your RPSS (shown on the top right of the covering letter sent with the statement).

I have not received a Pension Saving Statement 23/24, what action should I take?

HM Revenue & Customs (HMRC) has agreed the following guidance:

Who is affected:

• If you have not been sent a Pension Saving Statement 23/24 (PSS 23/24) but are due to receive one, we wrote to you in December 2024 to inform you that your PSS 23/24 would be issued late. This issue only affects a small number of members.
• If you have never completed Self-Assessment and never had an Annual Allowance (AA) tax charge, you do not need to take any action until you receive your PSS 23/24.

Action you have to take if you think you will have an Annual Allowance charge in 2023/24:

• Where you do not have your PSS 23/24 and therefore don’t have confirmation of your 2023/24 Pension Input Amount (PIA) you should include a provisional figure in your Self-Assessment tax return and submit as normal before the 31 January 2025 deadline. When you receive your PIA for tax year 2023/2024, you should then update your Self-Assessment tax return accordingly – this needs to be done within 12 months of the 31 January 2025 deadline.
• We appreciate it will be very difficult to estimate your tax liability, particularly as you will not have any PIAs from before 2023/24 available to calculate carry-forward. You should calculate the estimated charge to the best of your ability and keep records of the calculation. There is further guidance about how to estimate your provisional tax charge at: https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam121190
• If you submit your tax return with a provisional figure by the 31 January deadline then even if the provisional figure is incorrect, you will not receive a penalty.

Action you have to take if you think you will not have an Annual Allowance charge in 2023/24

• Where you have reasonable grounds to think that you have not breached the £60k standard AA amount, so don’t submit a Self-Assessment tax return by the 31 January 2025 deadline but when you receive your PSS 23/24 you have an Annual Allowance charge, you shouldn’t face a penalty – but this will be for HMRC to determine.
• If you only complete Self-Assessment because of your pension tax liability and will not incur an Annual Allowance charge for 2023/2024, you should inform HMRC that you no longer need to submit a Self-Assessment return. Information on how to do that can be found at: https://www.gov.uk/self-assessment-tax-returns/no-longer-need-to-send-a-tax-return

Correcting your provisional Self-Assessment figure

• When you correct your Self-Assessment provisional figure, if the final figure is higher than the provisional figure you will be charged interest if you pay the charge directly to HMRC. The interest rate is the Bank of England base rate plus 2.5%. If you pay by Scheme Pays there will not be an interest charge, and the Scheme Pays debit will be amended.
• Further information on updating a Self-Assessment return can be found at: https://www.gov.uk/self-assessment-tax-returns/corrections

Where can I find more information?

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