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Scheme Financial Reconciliation
In countdown bulletin 38, we explained that we would be offering all schemes the opportunity to request their financial position.
We have successfully tested the first step in our process with our pilot schemes and we are now offering all schemes currently in scope the opportunity to request their financial position as at 7 October 2018.
The schemes currently in scope are live Defined Benefit schemes and ceased Defined Benefit schemes who do not have a live file in scheme cessation. These schemes are potentially using the optional scheme reconciliation service.
The first step in the process for schemes in scope will be to request their surplus/deficit position as at 7 October 2018 by email to email@example.com.
The format of the email and the information required is set out below.
The financial position is requested for:
- Scheme Name
- Scheme Address
- Scheme Contracting-out Number
- I can confirm that I am the administrator of this scheme or I can confirm that I am the authorised third party acting as administrator of this scheme and I include an approval request
For data protection purposes, we must verify that the financial position is being requested by either the scheme administrator or a third party acting as administrator for the scheme. An approval letter will be required from the scheme trustee for requests from third party administrators.
Once the information provided has been checked, we will then confirm in a new email, the scheme’s financial position as at 7 October 2018.
The information provided will give an indication as to whether the scheme will be in surplus or deficit when bills or refunds are issued in April 2019.
However, we will be offsetting unused scheme funds against outstanding debt for the same scheme using automated solutions from January 2019 onwards.
If any debt over 6 years old is still outstanding following this offsetting, it will be written off by the billing exercise in April 2019.
Therefore, it is assumed that any deficit figure provided from the 7 October 2018 scan is a worst case scenario deficit unless further debt has been generated since.
We will be considering whether the above scheme financial reconciliation should be extended to ceased schemes who have a live file in scheme cessation.
We will give more detailed information on scheme financial reconciliation in future countdown bulletins.
Contributions Equivalent Premiums (CEPs) notified by automated response
The automated output from the latest ‘Not In Scheme (NIS) CEP’ was due to be returned to Pension Scheme Administrators by 30 November 2018 and the output from ‘CEP Part Period (PP)’ is due to be returned by 21 December 2018.
We ask schemes not to submit payment of the CEP amounts provided and we will include these in our final refund and billing exercises mentioned in the article above.
This decision has been made because of the number of activities that need to be carried out for scheme financial reconciliation and the interdependencies between them.
Any CEP amount requested by paper bill CA1620 should continue to be paid (including those issued as a result of clerical remainders from ‘NIS CEP’ and ‘CEP PP’).
The time limits for payment of CEP bills have not changed and are defined in the termination of contracted-out employment manual (CA14).
In countdown bulletin 38 we advised that we were awaiting DWP policy and legal advice on the HMRC proposed end date for scheme cessation activity.
Technical advice has now been received on contracting–out legislation and our previously communicated deadline of 31 December 2018 for scheme cessation queries still stands.
We will try to work all queries submitted on or before 31 December 2018 by 31 March 2019.
If you have any concerns over your ability to submit your queries by the deadline you should contact CRM.firstname.lastname@example.org.
Scheme Reconciliation Service (SRS)
Due to a higher than forecast increase in SRS queries leading up to the 31 October 2018 deadline, we are currently unable to sustain the agreed 3 month turnaround time for HMRC responses.
However, we remain committed to recovering our turnaround times and responding to all queries by the 31 March 2019.
Earlier editions of the National Insurance Services to Pension industry: countdown bulletins are also available.
Use form CA1611 to tell HMRC about termination of contracted-out employment - Contribution Equivalent Premium (CEP) payable.
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.email@example.com.