Guidance

Newsletter on the public service pensions remedy — June 2026

Published 24 July 2026

The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2026

The following tax regulations related to the public service pensions remedy came into force in 2023 and 2025:

• The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023 — SI 2023/113
• The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) (No. 2) Regulations 2023 — SI 2023/912
• The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2025 — SI 2025/419

The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2026 — SI 2026/673 have now been made and laid. These regulations make provision:

• in relation to how scheme pays operates for the remedy
• for the tax treatment of judges who received an early remedy
• to ensure the correct tax treatment of certain members of the armed forces pension schemes who elect for new scheme benefits
• in relation to extra amounts payable in respect of minor death benefits under the remedy
• for the due date for information under the tax administration framework
• for the tax treatment of excess teacher service

These changes are set out in the following sections.

Extending the scheme pays election deadline (Regulation 3 and 4)

Members affected by the remedy who had not started to take their benefits before 1 October 2023 (active and deferred members) have until 6 July 2027 to make a scheme pays election.

This applies to a scheme pays election in respect of:

• a new or additional annual allowance charge in a chapter 1 scheme as a result of ‘roll-back’
• a new or additional annual allowance charge in a judicial 2015 scheme as a result of the ‘options exercise’ made by a judge
• an annual allowance charge in a chapter 1 scheme for the tax year 2022 to 2023

This gives them the same deadline as those members who had started to take their benefits by that date (pensioner and deceased members), as set out in regulations 8 and 9 of SI 2023/113.

If the member misses the 6 July 2027 deadline, the election becomes a voluntary scheme pays request. For example, where in the case of the McCloud remedy, a member is unable to make a scheme pays election before the 6 July 2027 deadline (potentially due to delay in receiving their remedial pension savings statement), they will be able to make a voluntary scheme pays request for their scheme to pay their annual allowance charge. The scheme administrator must still pay the member’s annual allowance charge under treasury directions but does not become jointly and severally liable for that charge.

Active and deferred members affected by the remedy have until 5 July 2032 to amend a scheme pays notice. This matches the deadline for pensioner and deceased members.

Voluntary scheme pays deadline (Regulation 13)

Public service scheme administrators have a new deadline to pay a member’s annual allowance charge under voluntary scheme pays, where they are impacted by the remedy.

The deadline is 45 days after the end of the quarter in which the scheme administrator receives the request.

This replaces the normal Self Assessment deadline of 31 January after the end of the tax year to which the charge relates. If the tax is not paid by the new deadline, interest will be due on the unpaid tax.

A voluntary scheme pays request arises under the remedy only if the member did not make a scheme pays election by the deadline of 6 July 2027.

Making schemes pays elections through the ‘Calculate your public service pension adjustment service’ (Regulations 3, 4 and 13)

Members can elect to use scheme pays through the ‘public service pension adjustment service’. HMRC will then send the member’s election to the scheme, the scheme must treat this as a valid election, even though it was not sent to them directly by the member.

Regulations 3 and 4 (mandatory scheme pays election) and regulation 13 (voluntary scheme pays request) set out the operative date for these elections as:

• member date: the date the member submits the election through the ‘public service pension adjustment service’
• scheme administrator receipt date: the date HMRC sends the election notice to the scheme administrator

Scheme administrators need to be aware of both dates. HMRC will be updating existing processes to provide scheme administrators with their member’s date of submission.

The member date shows if the election qualifies as either:

• a mandatory scheme pays election (if made on or before 6 July 2027)
• a voluntary scheme pays request (if made after 6 July 2027)

The scheme administrator receipt date starts the tax payment timetable. The tax is due either:

• 45 days after the end of the quarter following the quarter in which the scheme administrator receives the request (in the case of a mandatory scheme pays election)
• 45 days after the end of the quarter in which the scheme administrator receives the request (in the case of a voluntary scheme pays request)

Example

HMRC sends the scheme pays election notice to the scheme administrator on 15 July 2026. It therefore qualifies as a mandatory scheme pays election.

This falls in the quarter 1 July 2026 to 30 September 2026.

The next quarter ends on 31 December 2026.

Payment deadline: the annual allowance charge must be paid by 14 February 2027.

Immediate detriment

Scheme administrators for chapter 1 schemes and chapter 2 judicial schemes implemented an immediate detriment remedy in respect of some members.

The immediate detriment remedy was an interim adjustment given before the main remedy legislation started to operate on 1 October 2023, under which the member’s remediable service (chapter 1 schemes) or remedy period scheme membership (chapter 2 judicial schemes) moved from their reformed scheme to their legacy scheme. Normal tax rules applied to the interim adjustment at the time it was given.

Final adjustments may have been required to give effect to the full statutory remedy once the Public Service Pensions and Judicial Offices Act came into force.

Immediate detriment and chapter 1 schemes

No change to the tax regulations is needed for chapter 1 schemes that gave an immediate detriment remedy.

The Public Service Pensions and Judicial Offices Act overwrote the immediate detriment remedy for chapter 1 schemes. This means the tax regulations can apply to provide the intended tax outcome in relation to the interim adjustment and any final adjustments.

Immediate detriment and chapter 2 judicial schemes (Regulations 6 to 8)

The immediate detriment remedy for judicial schemes moved members from a registered pension scheme (a judicial 2015 scheme) to an unregistered pension scheme (a judicial legacy scheme). This means only regulations 15(1) to (2), 42 and 43 of SI 2023/113 need to apply.

Regulations 6 to 8 modify these regulations to make sure they apply to judicial scheme members who received an immediate detriment remedy.

Scheme administrators of a judicial 2015 scheme may reclaim from HMRC annual allowance charges they paid for these members in relation to the tax years 2019 to 2020 to 2022 to 2023, and do not need to amend returns made in relation to the remedy period or the 2022 to 2023 tax year relating to this liability.

If the member had a transfer from a partnership pension account, these members could ignore that transfer when checking permitted transfers for fixed protection 2016. The transfer is also treated as a recognised transfer.

Armed forces pension scheme (AFPS) 75 members: new scheme benefits election (Regulation 10)

If an Armed Forces Pension Scheme 1975 (AFPS 75) member makes a new scheme benefits election, the scheme administrator may be required to pay benefits that match Early Departure Payments Scheme 2015 (EDP 15) benefits.

Regulation 10 treats those benefits as if they were paid from EDP 15 to ensure consistent tax treatment.

Armed Forces Pension Scheme 75 re-joiners: new scheme benefit election (Regulation 11)

If a re-joiner makes a new scheme benefits election, the re-joiner rules in part 4 of schedule 3 to the Armed Forces Pension Scheme Order 2005 (SI 2005/438) provide for the individual’s earlier service in the AFPS 75 to be aggregated into the Armed Forces Pension Scheme 2005 (AFPS 05).

Regulation 11 enables the re-joiner to keep their protected pension age in respect of the AFPS 75 equivalent benefits which become payable from the AFPS 05.

A re-joiner means a member of the AFPS 75 who left pensionable service and then rejoined pensionable service before the end of the remedy period as a member of the AFPS 05 and otherwise satisfies the criteria in the re-joiner rules.

Changes to the tax treatment of Trivial commutation lump sum death benefits (TCLSDBs) (Regulation 12)

Scheme administrators can pay an additional lump sum as a trivial commutation lump sum death benefit (TCLSDB) where:

• the extra amount is due because of the remedy
• the original TCLSDB was paid to a dependant who has since died, and the extra amount would have been payable as a TCLSDB if the dependant was alive

If both these conditions are met, the extra lump sum is treated as an authorised payment. It is also treated as a TCLSDB for income tax purposes.

If the original TCLSDB and the extra amount together go over the £30,000 limit, the excess cannot be a TCLSDB.

In these circumstances, either:

• the extra amount can be paid as a dependant’s scheme pension under regulation 11 of SI 2023/912 (PAYE will apply to the dependant’s scheme pension)

• the extra amount can be paid as a lump sum, with the part under the limit being a TCLSDB, and the part in excess of the limit being an unauthorised member payment and taxed as such (HMRC understands that schemes have specific compensation powers under the remedy which may be appropriate where they consider the remedy has had a detrimental effect on members)

Changes to reporting deadlines following a member’s death (Regulation 14)

If a member dies before or shortly after receiving a late remedy pension savings statement or benefit crystallisation event statement from the scheme administrator, their personal representatives have more time to send information to HMRC.

The deadlines are extended so that if the member dies before getting the statement, the personal representatives have three months from the date they receive it to send information to HMRC. If the member dies after receiving their statement but before the deadline to make a submission, their personal representatives have three months from the date of death to send information to HMRC.

Excess teacher service (Regulation 15)

Scheme administrators for the reformed Local Government Pension Schemes should ignore the final salary uplift when they work out the pension input amount, for rolled-back excess teacher service, in any pension input period.

Excess teacher service means pensionable service from a teaching role that is not the member’s main teacher service. Under the remedy, this service was ‘rolled-back’ from the reformed Teacher’ Pension Scheme (a chapter 1 new scheme) to the reformed Local Government Pension Schemes (which is treated as a chapter 1 legacy scheme in relation to excess teacher service). This may change the member’s pension rights for earlier tax years.

Transitional Tax-Free Amount Certificate (TTFAC)

Pension Schemes Newsletter 158, published in April 2024, provided clarification regarding TTFAC, the public service pension remedy, and the abolition of the Lifetime Allowance (LTA).

HMRC has received enquiries from schemes concerning the impact on members caused by delays in implementing the remedy, as well as whether targeted approaches may be permissible for affected remedy members. Pension schemes newsletter 158, published in April 2024, provided clarification regarding TTFAC, the public service pension remedy, and the abolition of the LTA.

The guidance within pension schemes newsletter 158 notes where a member has not yet been offered a choice, or that choice has not been implemented, administrators cannot be confident that the figures used to calculate pre-6 April 2024 lump sums are correct. As a result, it is essential for schemes to carefully validate each member’s position and refrain from issuing TTFAC where there is uncertainty regarding the underlying data.

HMRC acknowledges stakeholder concerns relating to the interaction between TTFACs and the McCloud remedy, particularly for high-earning scheme participants. These issues have been considered in coordination with HM treasury, considering scheme delivery, equitable treatment across public service schemes, and the broader pensions tax structure.

TTFACs were intentionally structured as single-use certificates, which needed to be applied for, before a member’s first relevant benefit crystallisation event. This method ensures clarity and uniformity following the removal of the Lifetime Allowance, while preventing unnecessary complexity or unequal treatment among member groups.

HMRC confirms that the government do not plan to make amendments to TTFAC legislation or procedures and, as such, the guidance detailed in pension schemes newsletter 158 remains relevant. HMRC understands that schemes have specific compensation powers under the remedy which may be appropriate where they consider the remedy, or delays in delivering the remedy have had a detrimental effect on members.