Guidance

Countdown bulletin 38 - November 2018

Published 2 November 2018

Scheme Reconciliation Service (SRS) Stalemate Queries

HMRC have worked with Pension Scheme Administrators (PSAs) to agree the following Stalemate Scenarios for SRS queries:-

Scenario 1

HMRC records show liability with the scheme but the scheme has no record of the member.

The automated employer details solution has provided details that do not appear to relate to the scheme, for example a supermarket name has been provided to the PSA of Local Government Scheme.

The PSA is confident that HMRC have the incorrect Scheme Contracting-out Number (SCON).

Scenario 2

HMRC records show liability with the scheme but the scheme has no record of the member.

The automated employer details solution has given partial details because the period of contracted-out is prior to 1998, for example ‘The Ba’.

The PSA is therefore unable to identify whether the employer refers to the scheme and is still unable to trace the member.

Scenario 3

HMRC records show liability with the scheme but the scheme records show the member transferred their liability to another scheme.

The PSA has no record of the SCON of the new scheme.

HMRC will accept stalemate queries up to and including the 31st December 2018.

The query file name must include ‘stalemate’.

HMRC will then review the file to ensure the queries meet the stalemate scenarios detailed above.

HMRC will attempt to trace the correct SCON and if successful, either update the HMRC record or ask the PSA to submit their queries for the Change of Responsible Paying Authority (CRPA) automated solution where multiple accounts require the same update.

Alternatively, HMRC will provide full employer details including the name and address if the correct SCON cannot be traced.

If, using the full employer details provided, the PSA:-

• confirms the employer is within their scheme, then the query is resolved and they accept liability
• identifies an alternative SCON, then they submit a CRPA query for the next available automated solution
• still can’t trace the individual, then the case is still at stalemate and PSAs should accept HMRC records.

HMRC will investigate stalemate queries until March 2019 but it is still possible that that not all members will be reconciled by the time SRS ends.

The information HMRC currently have from PSAs indicates that the number of unreconciled members will be very small.

HMRC appreciate that schemes will still have liability for members they cannot trace but the numbers will be smaller than before SRS.

There will still be opportunities to resolve stalemate queries after SRS ends using HMRC business as usual processes, such as when a query is received from an individual or when a PSA raises a Guaranteed Minimum Pension checker query at a life event.

Phase 7 Automated Rerun Plan

In Countdown Bulletin 37, we explained that the Phase 7 automated rerun plan had been amended.

We have received queries regarding the clerical response dates shown on the plan.

If your automated query file was loaded to your Shared Workspace (SWS) e-room on or before 31st October, you will receive clerical responses for any queries unresolved by automation.

If your automated query file was loaded to SWS after 31 October you will not receive clerical responses for any queries unresolved by automation.

Scheme Financial Reconciliation

In Countdown Bulletin 37, we explained that HMRC will refund surplus funds and bill outstanding debt via an automated solution in April 2019.

We have been asked to clarify the following:-

The majority of debt relates to unpaid Contribution Equivalent Premiums (CEPs) and we will re-instate liability in scheme if the bill from the automated solution is not paid. We are still considering our approach should the debt relate to unpaid Limited Revaluation Premiums (LRPs) and the bill from automation is not paid.

We appreciate that CEPs with an end date up to and including 5th April 2019 could be notified after we have issued the automated bills. We will therefore apply a cut-off date in our automated solution and any CEP debt raised after this date will be picked up by the business as usual enforcement process if it is not paid. We will communicate the cut-off date in a future Countdown Bulletin.

We can now provide the following update on scheme financial reconciliation:-

• a financial scan ran on 7th October to identify the current surplus/deficit position of each scheme. There will be further runs in December and February
• we have selected 1 Public Sector Scheme and 1 Private Sector Pension Scheme Administrator (PSA) to work with us to pilot the end to end financial reconciliation process.
• we have selected them based on the level of engagement we have had with them previously regarding financials and their willingness to help by responding to our questions/requests for information quickly
• the first step in the process for the pilot schemes will be to request their surplus/deficit position as at 7th October
• assuming this is successful, we will offer all schemes the opportunity to request their financial position and details will be provided in the next Countdown Bulletin.

Contribution Adjustment Action

In Countdown Bulletin 37, we explained that we were considering automating the contribution adjustment process but that this would depend on volumes.

We can confirm that the volumes were not sufficient to justify an automated solution. These cases will be worked clerically as long as they were submitted by 31 October and have supplementary evidence of trustee approval.

Requests for SRS data

To support the completion of reconciliation, HMRC have agreed that PSAs can submit requests for fresh cuts of SRS data up to and including 31 January 2019.

Scheme Cessation

The cut-off date for the submission of scheme cessation queries is 31 December 2018.

We are awaiting DWP Policy and Legal advice on the HMRC proposed end date for scheme cessation activity.

We will give an update in a future countdown bulletin.

Useful links

You can check scheme details using the Scheme Reconciliation Service.

Earlier editions of the National Insurance Services to Pension industry countdown bulletins are also available.

Contact details

For general queries about contracted-out pensions contact the contracted out pension schemes helpline.

Please continue to deal with your usual contracted-out pensions contact for your day to day enquiries.

General queries about the Scheme Reconciliation Service should be made to the Customer Relationship Team at email: CRM.schemereconciliationservice@hmrc.gsi.gov.uk.