Guidance

Countdown bulletin 32 - February 2018

Published 23 February 2018

Termination and transfer notices

Although Contracting-out came to an end in April 2016, schemes are still submitting termination/transfer notices with end dates on or after 6 April 2016.

Countdown Bulletin 29 advised that with the introduction of the new State Pension from 6 April 2016, Pension Scheme Administrators (PSAs) no longer need to submit termination and transfer notices where the period of contracted-out ends or transfers after 5 April 2016.

If you are reconciling your scheme, periods of contracted-out that end or transfer before 6 April 2016 can still be notified via Shared Workspace (SWS) using the Scheme Reconciliation Service (SRS) query template.

If you are ceasing your scheme, periods of contracted-out that end or transfer before 6 April 2016 can still be notified via Scheme Cessation SWS or the Scheme Cessation Mailbox.

Only form CA1611 will be accepted with an end date after 6 April 2016. However, the period of service, including transfers, must be less than two years. The end date must also be prior to 6 April 2019.

Any termination or transfer notices that are received and don’t follow the above guidelines won’t be actioned/processed.

Contributions Equivalent Premium (CEP) or Limited Revaluation Premium (LRP) refunds due to post 5 April 2016 Transfers

Following advice from DWP Policy, HM Revenue and Customs (HMRC) are introducing a process to allow PSAs to claim a CEP or LRP refund where a post 5 April 2016 transfer of membership or liability has taken place.

New Process

Schemes should request a CEP or LRP refund by sending a letter to HMRC providing the following information:

• members name
• National Insurance number
• the period of the CEP or LRP
• is the member taking up active service in the new scheme or is the responsible paying authority being changed
• date of transfer or date of change of RPA
• exporting Scheme Contracting-out Number (SCON)
• importing SCON
• importing scheme revaluation rate
• which scheme should receive the refund
• Signed Authority of the exporting scheme
• Signed Authority of the importing schemes

If the required information above isn’t supplied or the letter isn’t signed by both the importing and exporting schemes the letter will be returned.

Letters should be sent to:

PT Operations
North East England
BX9 1AN

If you’ve previously submitted a form CA1888 and requested a CEP or LRP refund, then your request has been stockpiled awaiting DWP Policy advice. Your form CA1888 will now be returned to you to notify HMRC as described above.

The Guaranteed Minimum Pension (GMP) checker doesn’t currently cater for post 5 April 2016 transfers unless the period of active service being transferred has an end date of 5 April 2016. We will be able to work around this if the revaluation rate of the scheme is S148 and we will provide further information in future bulletins.

However, if the revaluation rate is fixed, then the GMP checker will not be able to provide subsequent life event calculations for the importing scheme. Any fixed rate scheme accepting a post 5 April 2016 transfer of active service where a CEP or LRP refund has been made should consider this. Where only a change of responsible paying authority applies, the GMP checker can provide the subsequent life event calculations.

The 2018 statement (that won’t now be issued) would have given the contracted-out picture as at 5 April 2016. The Check your State Pension service already contains a disclaimer at the time of forecast which includes reference to potential changes. This disclaimer is being updated to cover the situation when people have had transfers after 6 April 2016.

Matched members not showing on SRS refreshed output

PSAs are raising issues because members shown and matched on SRS output or on ‘Was In Scheme’ automated responses aren’t appearing on subsequent refreshed data. We’ve identified some common situations where this will happen and would ask that schemes check for these before notifying us that there is a potential issue.

1. The member has died since the original SRS extract and there is no qualifying spouse. The member won’t appear on refreshed SRS data.
2. The member type was 2 (a pensioner) on the original extract but has since died leaving a qualifying widow. The member will be shown as Type 3 on the refreshed SRS data.
3. The member type was 1 (an early leaver) on the original extract but has since reached State Pension age. The member will be shown as Type 2 on the refreshed SRS data.
4. The period of liability refers to a period in the Isle of Man and the National Insurance record now shows UK liability only. The member won’t appear on refreshed SRS data.
5. The period has been transferred to another scheme. We’re reviewing our processes so that we don’t change the scheme more than once as a result of SRS queries.
6. You’ve raised a ‘Was In Scheme’ query for a deceased member and received a response advising that either we’ve terminated the membership in your scheme or that liability is already held in your scheme for the period advised. The member may not be shown on a subsequent SRS refresh because the automated ‘Was In Scheme’ solution can, in certain circumstances, identify a surviving spouse where the SRS cannot. In these cases, you should accept your ‘Was In Scheme’ response as correct and not query your refreshed SRS data.

Secondary type 5 queries

In Countdown Bulletin 23 we advised:

If you haven’t received responses for all your type 5 output from your initial run of SRS, please follow the steps below:

• send a query template with SCON, National Insurance Number, surname and initial(s) populated in the correct fields and in the correct format and in the correct format as in the table above
• your file name should include ‘ST5 AUTOMATION’

In return you’ll receive standard automated responses for approximately 80% of your queries. The remaining 20% will be worked clerically and returned as agreed with the Customer Relationship Manager (CRM).

We’re still receiving high volumes of secondary type 5 queries.

The secondary type 5 automated solution and clerical action doesn’t update HMRC records. Any re-runs of SRS data will continue to output type 5 even if the automated solution or clerical response has previously provided full membership details. Retain the information provided rather than requesting re-runs of the type 5 solution after every refresh of SRS data.

Data limit for query templates sent for an automated solution

Schemes sending a query template for an automated solution don’t have to adhere to a limit of 1,000 queries per template. The data limit per template is 10MB for automation.

Useful Links

Please read HMRC: pension schemes reconciliation services for more information.

There are also earlier editions of the National Insurance Services to Pension industry: countdown bulletins available.

Contact details

For general queries about Contracted-out Pensions please contact the helpline.

Telephone: 0300 200 3507

Please continue to deal with your usual Contracted-out Pensions contact for your day to day enquiries.

General queries about the SRS should be made to the CRM.

Email: CRM.schemereconciliationservice@hmrc.gsi.gov.uk