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GMP Overpayments Arising from a Scheme’s Reconciliation Exercise

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Thursday, 08 February 2018 09:41

In common with public service schemes across the UK a number of overpayments are expected to be identified from the reconciliation exercise where current GMP data held by schemes is incorrect. This will have resulted in schemes paying too much annual indexation to affected pensioners where all or part of the GMP indexation has also been paid by DWP.

A similar exercise undertaken in 2008/09 identified schemes were found to be holding incorrect GMP data. Scottish Ministers chose to allow the pension in payment to remain unadjusted going forward for affected pensioners in the LGPS, Police and Firefighter schemes. This was achieved by introducing legislation that provided for a new scheme award known as an increased Pension Entitlement (IPE) which reflected the GMP related overpayment.  It was not possible to introduce an IPE for either the Teachers' or the NHS scheme as this would have required HM Treasury consent which was not given.

Scottish Ministers have decided that a similar approach should be taken for GMP related overpayments that arise from the current reconciliation exercise. Again this means that affected pensions in the LGPS, Police and Firefighter schemes will see their existing level of pension maintained by the award of an IPE and regulations to provide for this award will be consulted on during 2018. However as in 2008/9 it will not be possible to apply an IPE to affected Teachers' and NHS pensioners as to provide a similar approach requires HM Treasury consent for the necessary legislative changes.

A decision on how any accrued overpayments will be handled will be decided by the scheme's Accountable Officer as soon as the total number and amount of overpayments are known. There may also be a small number of cases where the incorrect GMP data has led to an underpayment of pension.  In these cases the affected pension will be corrected going forward with any arrears being paid to the pensioner.

SPPA will not be able to identify which pensioners are affected until the reconciliation exercise concludes in late 2018 so cannot communicate directly with affected members at this time. This will be done at the conclusion of the reconciliation along with a decision on how accrued GMP related overpayments will be managed. In the meantime the following Q&A aims to address some of the questions that may arise.

Q&A: GMP overpayments arising from a scheme's reconciliation exercise


Allowing ‘Voluntary’ Scheme Pays elections in respect of the 2016/17 tax year and beyond

Friday, 26 January 2018 14:28

From the 2016/17 tax year, SPPA have introduced an option for members who become subject to an Annual Allowance tax charge but who are unable to meet the statutory conditions to ask the NHS, Teachers, Fire and Police Schemes to meet this tax charge on their behalf. All pension savings that have accrued since 6 April 2016, that have triggered a tax charge against:

the member's Annual Allowance threshold, andeither do not qualify for, or cannot be met in full using the Mandatory Scheme Pays election mechanism

can now be paid by the NHS, Teachers, Fire and Police Schemes using a Voluntary Scheme Pays election.

Please note that deadlines for Voluntary Scheme Pays and Mandatory Scheme Pays are different.  For the 2016/17:

 Scheme Pays  Mandatory  Voluntary
 Conditions  Pension input amount in the final salary scheme or CARE scheme is greater than the Annual Allowance and a total Annual Allowance charge of more than £2,000.  Pension input amount in the final salary scheme and the CARE scheme results in an Annual Allowance charge of more than £2,000.
 Member Self-assessment submitted to HMRC  Paper - 31 October 2017 Electronic - 31 January 2018  Paper - 31 October 2017, Electronic - 31 January 2018
 Election Deadline  31 July 2018  31 July 2018
 Liability  Shared between you and SPPA  You
 Deadline the tax must be paid to HMRC (without interest)  14 February 2019  31 January 2018
 Interest  Nil if SPPA makes payment by 14 February 2019  From 31 January 2018 to the date SPPA makes payment

The SPPA will not accept  scheme pays if members do not have an annual allowance tax charge arising singly or in aggregate in the NHS, Teachers, Fire or Police schemes that they are in.

The member must provide us with details of the tax charge they face and we will have to check if this has resulted in a tax charge either singly or in aggregate. Therefore where members have not already had a pension saving statement, they may ask for a pension saving statement.  Schemes have three months to provide a statement on request, provided they have all the relevant information.  For 2016/17 members must elect for scheme pays by the 31st of July 2018  if they wish us to pay the tax which  would be paid in the next tax return SPPA makes.  These returns are submitted quarterly. 

The member  is liable for any interest  accrued in respect of scheme pays e.g. for 2016/17 interest would be accrued from 31st January 2018 until the tax is paid. SPPA will not pay any interest charges in respect of a voluntary Scheme Pays election.

When completing self-assessment there is a requirement to provide details of the pension scheme tax reference number.  If you have a charge against more than one scheme you should provide HMRC with details relating to the amount of Annual Allowance charge allocated against each scheme and the relevant scheme tax reference numbers relating to each charge.  You can use the 'additional information' section to do this.

To see further information and what this may mean for you please refer to the Scheme Pays section on the SPPA internet, which is currently being updated to reflect these changes:

We regret that we cannot revisit previous cases that were denied the opportunity to make a 'Voluntary' Scheme Pays election in respect of tax years up to 5 April 2016.


Indexation and Equalisation of Guaranteed Minimum Pensions (GMP) from 2018

Tuesday, 23 January 2018 10:32

The UK government consulted between 28 November 2016 and 20 February 2017 on how GMP indexation and equalisation should be applied to public service schemes going forward from 6 December 2018. An interim solution was introduced for the period 6 April 2016 to 5 December 2018 whereby public service schemes will pay the full indexation for members reaching state pension age between these dates. The three options under consideration were:

· Case by case – an annual comparison of what a member receives under the old and new system, which would also include a further comparator to ensure equalisation;

· Full indexation - a continuation of the interim solution; and  

· Conversion - convert the accrued GMP into a scheme benefit.

The UK government has now considered the replies it received and has issued a formal response to the consultation which is available via the following link (which also provides a copy of the consultation paper): Indexation and equalisation of GMP in public service pension schemes - GOV.UK.

In brief, the case by case option has now been ruled out. It has been decided to extend the interim solution from 6 December 2018 to 5 April 2021 to allow further consideration of implementing GMP conversion as a longer-term solution. The UK government will continue to consult with departments and schemes to decide whether a suitable methodology and legislation can be developed to enable GMP conversion to take place in the future. The UK government will also continue to take account of alternative solutions that may also address this issue.


Annual Allowance 2016/2017

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Last Updated on Monday, 04 March 2019 11:32

The UK Government sets limits on the amount you can build up in your pension schemes each year and benefit from tax relief. This is known as the Annual Allowance (AA) and the limit for the 2016/2017 year is £40,000. The AA limit includes all superannuation and private pensions but does not include the Government State Pension.

Pension scheme administrators have a legislative requirement to send pension savings statements to members by 6 October 2017 if they exceed the Annual Allowance (AA) in their registered scheme. SPPA has provided members who have exceeded the AA with pension savings statement(s) detailing the Pension Input Amounts (PIA) i.e amount of growth in your pension values for 2016/2017. We have also provided you with PIA values for the previous 3 years as members can offset an AA breach in any one year against any spare unused allowance in the previous 3 years.

How to identify if you have incurred a tax charge

HMRC have developed a calculator If a tax charge is applicable this must be reported to HMRC through self assessment by 31 January 2018 and any monies due must be received by them by this date. You may have the right to ask SPPA to arrange payment of some, or all of your AA tax liability to HMRC. This is known as ‘Scheme Pays’ but SPPA will only accept a scheme pays election for your SPPA pension scheme liabilities. To qualify for ‘Scheme Pays’ you must meet the HMRC mandatory requirements. Please see further information on Scheme Pays.

The table below shows the Annual Allowance limits from 6 April 2011:

 Tax year   Annual Allowance 
 2017/18  £40,000
 2016/17  £40,000
 2015/16  £80,000
 2014/15  £40,000
 2013/14  £50,000
 2012/13  £50,000
 2011/12  £50,000

Changes have also been made from 6 April 2016 with the introduction of Tapered Annual Allowance for members with earnings over £110,000. Please see further information on these AA changes 2016/2017.

If you have received an Annual Allowance pension savings statement and have an enquiry about the earnings quoted, please contact your employer in the first instance.   All other enquiries relating to Annual Allowance  should be emailed to This e-mail address is being protected from spambots. You need JavaScript enabled to view it


HMRC Personal Tax Account

Friday, 28 July 2017 08:18

HMRC have introduced a new service to allow you to manage your personal tax affairs.
Your online Personal Tax Account is a new way to view and manage your tax affairs in one secure place. There are a range of services available with more being added all the time.
You can use your personal tax account to:

• check your Income Tax estimate and tax code
• fill in, send and view a personal tax return
• claim a tax refund
• check and manage your tax credits
• check your State Pension
• track tax forms that you’ve submitted online
• check or update your Marriage Allowance
• tell HMRC about a change of address
• check or update benefits you get from work, for example company car details and medical insurance

Visit the HMRC website to sign in or set up your Personal Tax account.

Any queries relating to your personal tax must be made to HMRC on 0300 200 3300.

HMRC have introduced a new service to allow you to manage your personal tax affairs.

Your online Personal Tax Account is a new way to view and manage your tax affairs in one secure place. There are a range of services available with more being added all the time.

You can use your personal tax account to:

    • check your Income Tax estimate and tax code
    • fill in, send and view a personal tax return
    • claim a tax refund
    • check and manage your tax credits
    • check your State Pension
    • track tax forms that you’ve submitted online
    • check or update your Marriage Allowance
    • tell HMRC about a change of address
    • check or update benefits you get from work, for example company car details and medical insurance

Visit the HMRC website to sign in or set up your Personal Tax account at;

 HMRC Personal tax account: sign in or set up - GOV.UK

Any queries relating to your personal tax must be made to HMRC on 0300 200 3300


Appointment of new SPPA Chief Executive

Wednesday, 05 July 2017 10:34

Penelope Cooper 4

The Scottish Public Pensions Agency has announced the appointment of Penelope Cooper as its new Chief Executive.

Penelope, who is a Chartered Manager, will be responsible for the smooth running of the Agency in its management of key Public Sector Pension Schemes.

Penelope has 25 years' experience working in the Financial Sector in Scotland, London and mainland Europe, working for a range of companies including Citibank, Standard Life, HBOS and OneLife. She has gained a wide experience across the sector, and specifically within Pensions and Life Assurance.

She has also previously served as Chief Executive of the World Association of Girl Guides and Girl Scouts, Europe.

Originally from Wales, after 14 years of working in mainland Europe, Penelope has returned to Scotland where she has very strong family connections.

Penelope said ' I am delighted to be joining SPPA at an exciting time for both the organisation, and the pensions industry more generally. I look forward to building on the successes already achieved, and to preparing the SPPA for the opportunities that lie ahead.'


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Link to Scottish Government Website