Dental News
Autumn 2023

Following the McCloud case which the Court of Appeal ruled that the firefighter’s public sector pension was age discriminatory, pension changes are now being implemented to the majority of public sector pensions to ensure that all active pension members are treated equally. This includes the NHS Pension scheme.

Aspects of the 2015 NHS Pension scheme were perceived as less attractive, such as a retirement date for younger members of up to eight years later than those older members within the 1995/2008 NHS Pension scheme who were also entitled to remain in the 1995/2008 Pension scheme for longer.

This process will affect members who were in the 1995/2008 NHS Pension Scheme before 31 March 2012 and had continuous pensionable public service until they were transferred into the 2015 Pension scheme on or after 1 April 2015.

How will the changes be implemented?

NHS Pensions have implemented the changes to remedy matters in two stages.

In 2022, all active members (regardless of age) were moved onto the 2015 NHS Pension Scheme and the legacy 1995/2008 NHS Pension Scheme was closed. Members of the legacy 1995/2008 NHS Pension Scheme could retain any service earned before 1 April 2022 and access pension benefits in the same way. From April 2022, members then accrued pension benefits under the 2015 scheme.

The second step was to alleviate discrimination that may have taken place during the “remedy” period (between 1 April 2015 and 31 March 2022). Affected members will receive accrued pension benefits that they were entitled to and potentially lost out on when previously placed into the 2015 scheme. On 1 October 2023, NHS Pensions commenced implementing a “rollback”, whereby any continuous service which affected members had in the 2015 Pension Scheme between 1 April 2015 and 31 March 2022 was transferred or “rolled back” into the 1995/2008 pension scheme.

Roll back is automatic until members have decided whether to opt for either scheme benefits, which NHS aim to offer a choice on retirement from April 2024 onwards. For those members retiring before April 2024, NHS will contact these individuals and ask to make choices at a later stage.

The rollback procedures may cause potential pension annual allowance issues, in particular for those who may have been liable to an annual allowance charge during the remedy period (between 2015/16 and 2021/22 tax years).

How will affected members be informed?

Members affected by rollback will receive a “remediable service pension savings statement” for the tax years during the remedy period. This is essentially an annual allowance statement showing the recalculated pension input for the period 2015/16 through to 2021/22 years and pension input amounts for the 3 tax years before i.e. 2012/13, 2013/14 and 2014/15.  

Affected members will receive the remediable service pension savings statement by 6 October 2024 and will then receive their 2022/23 annual allowance statement. NHS Pensions are hoping to be sending the majority of these statements from April 2024 onwards.

How will affected members report potential pension annual allowance issues following rollback?

Affected members will not need to report any annual allowance charge for 2022/23 on their 2022/23 Self Assessment Tax Return (which will instead be dealt with via HMRC’s Digital Service (see below))

HMRC have also confirmed that members affected by rollback will not be required to resubmit Self-Assessment Tax Returns for any tax year during the remedy period (tax years 2015/16 to 2021/22) or for those that are eligible to an annual allowance charge for 2022/23 tax year.

Instead, affected members and agents can report and correct their pension annual allowance position by using a newly launched HMRC digital service.  

The online service enables members to:-

• Reassess any previous annual allowance charges during the remedy period tax years
• Make an application for a refund of any previously overpaid annual allowance charges for the 2019/20, 2020/21 and 2021/22 tax years
• Make an application to claim compensation for any previously overpaid annual allowance charges for 2015/16 to 2018/19 tax years

After the HMRC online service has been used to report any pension changes, HM Revenue & Customs will review the information. If there are additional tax charges to pay, HM Revenue & Customs will issue a notice by post. In the event that that a member has previously paid a tax charge and the recalculation leads to a position where tax is repayable, HM Revenue & Customs will issue a tax refund directly using the bank details held on record.

In instances, whereby members have previously elected for “Scheme Pays” and tax charges have been settled by the NHS Pension scheme, HM Revenue & Customs will liaise with NHS Pensions to determine whether the pension scheme will need to repay overpaid tax charges paid between 6 April 2015 to 5 April 2019 and if applicable, increase pension benefits to cover the amount of repayment due for overpaid tax charges previously paid on the member’s behalf.

How will members unaffected by rollback report their annual allowance charge for 2022/23?

Members not affected by rollback will receive their annual allowance statement for 2022/23 by 6 October 2023 and will need to continue to report any annual allowance charge for 2022/23 on their 2022/23 Self Assessment Tax Return.

Scheme pays deadlines

For individuals who have a pension tax charge, the liability can be met by the mandatory scheme pays facility.

The Mandatory scheme pays deadlines for members who are affected have subsequently changed and scheme pays elections will need to be made by 6 July 2025 (active and deferred members) or 6 July 2027 (pensioner members).

The extended deadlines shall also apply to annual allowance charges arising in the 2019/20, 2020/21 and 2021/22 tax years.

For members not affected by roll back, the normal deadline of 31 July 2024 shall apply.

We are here to help!

We do appreciate that the above is a complex area and the information is ever evolving.  Due to the significant pressure on NHS Pensions to process and implement systems, it is likely to take a considerable amount of time for all members to be issued with pension statements.

We request that clients forward their pension statements to their contact at Humphrey & Co. We will then be able to advise you accordingly as to how to report any changes.

In the meantime, we do encourage our clients to consider whether they are affected by the remedy by accessing the following HMRC online tool below:-

Check if you are affected by the public service pensions remedy - GOV.UK (www.gov.uk)

We strongly advise you take independent pension advice should the above be relevant to you.