Guidance

Countdown bulletin 40 - December 2018

Published 19 December 2018

Scheme Financial Reconciliation update

In countdown bulletin 39 we told you:

• which schemes were in scope for Scheme Financial Reconciliation
• how to request your surplus or deficit position from our October scan

We received the outputs from our latest scan of scheme financials on 13 December. Therefore, any new or second requests will provide your surplus or deficit position as at this date.

This update is to tell you about the implications if you do not request your financial position.

If you are in surplus when our final refund and billing exercises run in April 2019, we will not give you a refund unless you have already engaged with us and requested your financial position. Your surplus will be retained in the National Insurance Fund.

If you are in deficit when our final refund and billing exercises run in April 2019, we will issue a bill to the Pension Scheme Administrator (PSA) address according to HMRC records. If we do not receive payment, we will enforce liability in scheme for any Contributions Equivalent Premiums (CEP) that are still unpaid.

As part of the surplus or deficit request process, we are updating the PSA addresses on HMRC records to keep alternative payee names and addresses for refunds.

You must send new requests for surplus or deficit positions by email to: schemereconciliationtelephoneenquiry.inbox@hmrc.gsi.gov.uk, telling us who the requested financial position is for by providing the:

• scheme name
• scheme address
• Scheme Contracting-out Number (SCON)

You must also confirm:

• that you are the administrator of this scheme, or that you are an authorised third party and have attached trustee approval
• the payee name is the same as the scheme name - or you must provide the payee name if it’s different
• the address for payment is the same as the scheme address - or you must provide the address for payment if it’s different

Some third parties have asked if they must provide trustee approval if they have already done so for the Scheme Reconciliation Service (SRS).

The SRS trustee approval was for HMRC to share scheme reconciliation data with third parties. For example, scheme membership details of members who have liability in the scheme.

We need new authority to share scheme financial data with third parties, for example, details of:

• the overall financial position of a scheme
• all outstanding debt and available funds for members who may not have been in scope for membership reconciliation

Due to the differences in the data provided by these 2 services, we cannot assume that the original trustee approval stands.

Contributions Equivalent Premium (CEP) guidance after 5 April 2016

HMRC will publish guidance about the ongoing administration of contracted-out pension rights soon.

As CEPs after 5 April 2016 must have an end date of 5 April 2018 or earlier, they will not be in the new guidance. This is because taking into account the time limits for notification, CEP notice should have already been given by 6 October 2018.

For a CEP after 5 April:

• the employment must have started before 6 April 2016 and ended after it
• the period must have been continuous

All other CEP criteria before 6 April applies to CEPs after 5 April 2016 including:

• the total period of employment within the Contracted-out Salary Related (COSR) scheme must be less than 2 years
• total qualifying service as defined by the Pension Schemes Act 1993, is less than 2 years
• the event occurs before the member attains the scheme’s normal pension age or (if earlier) the end of the tax year preceding that in which the earner attains pensionable age (age 60 for women and 65 for men)

Shared Workspace issue

The 31 December deadline for scheme cessation and stalemate queries has been extended to 9 January 2019. This is due to the recent access issue with Shared Workspace experienced by some PSAs.

Any other deadlines affected by the issue should be sent to: CRM.schemereconciliationservice@hmrc.gsi.gov.uk and will be considered on a case by case basis.

Clerical Scheme Reconciliation Service queries

Apart from stalemate queries, any clerical SRS queries submitted after the 31 October deadline will have been rejected.

If a rejected clerical file is suitable for an automated run, it can be resubmitted as long as the PSA submission deadline has not passed.

If you believe a clerical query was not actioned correctly on a previous submission, send details of the file issue number and line number of the relevant query to: CRM.schemereconciliationservice@hmrc.gsi.gov.uk. This will be investigated and reworked if necessary.

Any other unresolved issues will be resolved during the business as usual action when the customer reaches a life event.

Scheme Reconciliation Service stalemate queries

In countdown bulletin 38 we provided the stalemate scenarios for SRS queries.

For all scenarios, the query file name must include ‘stalemate’.

For scenario 3, you must provide both the:

• receiving scheme name or the receiving employer name
• effective date of transfer (take up date) where possible

If the above information is not provided the queries will be returned un-actioned.

Useful links

Read HMRC: pension schemes reconciliation services for more information.

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

Manual Termination of Contracted-Out Employment - CA14.

Use form CA1611 to tell HMRC about termination of contracted-out employment - Contribution Equivalent Premium (CEP) payable.

Contact details

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

You should 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.