How those impacted by the public section pensions remedy will have more time to apply for lifetime allowance (LTA) protections and to use scheme pays.
HRMC issued the latest edition of the public service pension scheme remedy newsletter on 20 June.
The newsletter confirmed two useful extension of deadlines and clarified the payment of additional lump sum death payments for those subject to the remedy.
Lifetime allowance protection application extension
Members who have remediable service under the remedy will have an extended deadline to apply for fixed or individual protection 2016. The deadline is extended to 6 April 2027. As a reminder the deadline for all other individuals was 5 April 2025 and so has now passed. This may give some clients who have missed the deadline another opportunity to apply for the protections.
Scheme pays elections
The newsletter also confirms that members who started to take benefits before 1 October 2023, will have until 5 July 2032 to amend their scheme pays notice relating to annual allowance charges arising from the remedy. Members who had not started to take their pension by that date will have until 5 July 2030.
Top-up payments of defined benefits lump sum death benefits
The newsletter also confirms that payments of additional defined benefits lump sum death benefits arising due to the remedy paid on or after 6 April 2024 will use up the member’s lump sum and death benefit allowance. The payment will not be subject to the lifetime allowance rules and test.
Where the original lump sum death benefit payment was made in relation to a member who died aged under 75 and within the ‘relevant two-year period’, the top-up payment may still be free of income tax up to the member’s available lump sum and death benefit allowance.