McCloud Pension Remedy Update

In April 2015 a new pension scheme (called the FPS 2015) was introduced. Most members moved to this new scheme in April 2015. As part of the roll out of the new scheme, members closest to their normal pension age were given ‘protection’ and remained in their legacy scheme after April 2015. This protection period ran from 1 April 2015 and ended for all members at 31 March 2022. This time period is now known as the ‘Remedy period’.

After a legal challenge, the courts determined that these protections were age discriminatory and not fair to all members of the pension scheme i.e. younger members in the scheme were missing out on additional years of benefits from the original pension schemes.

Not all members are affected by the remedy period. Members that are eligible must:

• Have been in pensionable service on or before 31 March 2012

• Had pensionable service between 1 April 2015 and 31 March 2022

• Not have a gap in service of 5 years or more (known as a disqualifying break)

Pensionable service does not have to have been in the Firefighter's Pension Scheme, it could also have been in another relevant public service pension scheme.

If you retired during the Remedy Period, XPS pensions will contact you with more information. This could be anytime between October 2023 and March 2025. Please note that those members who retired under ill health, passed away or had tapered/no protection will be prioritised. Due to the large number of cases involved, we cannot confirm any timescales at this point. 

I’m retired member (opens in new window)

If you are still in service and a member of the pension scheme, you’ll receive further information from XPS pensions next August. You don’t need to take any action now.

I’m an active or deferred member (opens in new window)​​​​​​​

If you have left the service, but are not yet retirement age, you will hear from XPS pensions between October 2023 and March 2025 about your choices. 

If you are in service but intend to retire before August 2024 when you tell us you are going to retire, XPS pensions will provide you with an Remediable Service Statement (RSS) before you retire. This will lay out your choice of benefits. Please provide at least 3-6 months’ notice to ensure your benefits are calculated and you can have a choice when you leave.

I’m going to retire before 1 October 2023 (opens in new window)

In September and October we will be writing to you to confirm if you are in scope for the remedy, and over the coming weeks and months more details will be added to this page.

Progress Update

In November and early December XPS produced 25 IC-RSSs including fully protected members, taper protected and unprotected members. Those members will now have received a letter from XPS advising them how to access their RSS.

This means that to date 65% of all IC-RSSs for Cheshire Fire members have now been produced, with the deadline for all statements being 31st March 2025. Of those in the Immediate Detriment cohort, 68% of RSSs have now been produced.

Whilst the regulations allow up to 31^st March 2025 to issue RSSs, it has always been Cheshire Fire’s aim to ensure RSSs were issued by the indicative date of 30^th November 2024 which was agreed nationally back in 2023. However, the delays caused by the tax issues have inevitably impacted XPS’s delivery timetable and, as a result, they have not been able to complete all RSSs by the indicative deadline. Outstanding cases are likely to be those that are of a more complex nature or involve transfers for which we are still awaiting data.

We apologise that we have been unable to achieve this date for all involved. We appreciate that the delays are deeply frustrating and XPS have assured us that they are working hard to minimise further delays and are aiming to issue the remaining RSSs as soon as possible. Unfortunately, we are not able to provide definitive timescales at the moment, but as soon as this has been confirmed we will let members know. 

R-PSS Update

XPS have now started to issue remediable pension savings statements to those taper/unprotected members whose annual allowance or Lifetime Allowance tax position may have changed as a result of being rolled back to the legacy scheme. Once a member has received their R-PSS they may need to report any changes to HMRC.

HMRC have provided a dedicated tool for members to do this which can be found at Calculate your public service pension adjustment - GOV.UK

Guidance about the information you will need to report can also be found at this link along with a video tutorial How to calculate your public service pension adjustment - YouTube. The LGA have also provided member factsheets to help with this HMRC Member Tax Adjustment Calculator | Firefighters' Pension Scheme

HMRC also have a dedicated helpline on 0330 123 1079 or publicservicepensionsremedy@hmrc.gov.uk

For changes during tax years 2015/16 to 2022/23 you have until the later of 31 January 2025 or three months from the point of receiving your R-PSS if this is received on or after 1 November 2024 to submit your details via the HMRC digital service for the remedy years.

For tax year 2023/24 you have until 31 January 2025 to submit a Self-Assessment return if applicable. 11. You have until 31 July 2025 to make any Scheme Pays Election if applicable.

The National Police Chiefs Council has provided Police Officers with a list of tax/pension advisors, providers and services that they regularly work with who may be of interest to fire colleagues whose pension is similar and who feel they need further advice. This is not an exhaustive list and you may wish to find your own local accountant or advisor.  NPCC list of tax support advisors 

XPS Update

XPS have provided their latest update on the progress of the remedy implementation - XPS update

On 26^th September HMRC published the long awaited guidance on the offsetting tax issue which has been blocking a number of immediate choice pensioner cases from being progressed Public service pensions remedy newsletter — September 2024 - GOV.UK (www.gov.uk).

On 3^rd October the sector met with the NPCC and colleagues from the Police sector to discuss the technical guidance in more detail. Although guidance has now been published, Scheme Managers need to take a view, in conjunction with their administrators, about whether they are comfortable that the guidance and assurances from the minister are sufficient to move forward.

Cheshire Fire and Rescue Service have decided that we do now have the necessary assurances and have instructed XPS pensions to complete the remaining calculations for those members who have been paused.

Progress Update

To date, 41% of Cheshire Fire’s immediate choice pensioners have been issued with their RSS. XPS have been focussing on completing RSSs for cases not affected by the tax issue. This has included ill-health pensioners, beneficiary cases, fully protected members, and also includes some immediate detriment members who were unprotected and taper protected but didn’t take the maximum pension when they retired.

Of the immediate detriment cohort, 29% of cases have now been completed.

Next Steps

Over the next couple of months XPS’s focus will shift to completing calculations for unprotected and taper protected members who took the maximum lump sum.

The original indicative timeframes were to provide these RSSs by the end of November 2024. Whilst we are still aiming to achieve this deadline for the majority of cases, the delays have inevitably impacted XPS’s delivery timetable and there may be a small number of more complicated cases which take a little longer, for example those with Annual Allowance implications or those who are also involved in the ongoing retained modified scheme remedy.

XPS have now implemented a Member Hub for the issuance of RSS statements. Once your RSS is available you will receive a letter from XPS advising that your statement is ready to view. This letter will include details of how to log on, and a telephone number for the Hub Team who can assist with any logging on issues. Once members are logged on, you will be able to view your RSS and options, and also use the Hub to notify XPS of your choice. The relevant Q&As are on the site, along with any links to other relevant sites to assist you in making your choice.

Tax on Lump Sums Update

On 18^th July, following the change of Government, the Firefighters’ Pension Scheme Advisory Board wrote to the Minister of State for Crime, Policing and Fire, Dame Diana Johnson. The letter outlined the sector’s concerns regarding the ongoing delays due to issues with taxation of lump sums, and the impact this was having on members. On 12^th August, the fire Minister responded to advise that the Government acknowledges that legislative changes will be needed to tax regulations to resolve the issue and that this will not be before 2025.

This legislation will be retrospective to 1 October 2023, which means that Scheme Managers can implement the changes in advance of the amending legislation coming into force. Services are now waiting for HMRC to issue a newsletter and confirm guidance outlining how administrators should implement the tax changes. As soon as we have a further update on this we will let you know.

A copy of this correspondence can be found at Correspondence (fpsboard.org)

XPS Update

Please find below further updates from our pension administrator XPS pensions

update-no-5-v4.pdf (myownpension.co.uk)

XPS have now completed 44 Immediate Choice RSSs for Cheshire Fire cases not affected by the tax issue. This equates to 24% of Cheshire Fire’s immediate choice cases. Immediate choice cases include unprotected and taper protected members as well as those who were fully protected in their final salary scheme.

Members are reminded that there are several resources available to assist with understanding the RSS at What is Remedy? | Firefighters' Pension Scheme (fpsmember.org) and Remedy FAQs 2024 (fpsmember.org). If you need any further assistance understanding your statement please contact either XPS or Jill Swift.

Contingent Decisions and Compensation Update

Guidance on contingent decisions and compensation claims has now been produced by the LGA and is available on this webpage above.

Contingent decisions relate to cases where a member may have made a different decision if it hadn’t been for the discrimination. At present the only scenarios that this covers opt outs and voluntary contributions.

Please note that the compensation guidance does not cover injury to feelings compensation. This is being dealt with separately through the tribunal/court process.

HMRC Tax Portal

For any members who need to report adjusted pension information for Annual Allowance purposes, the HMRC tax portal which has been temporarily closed is now available again Calculate your public service pension adjustment - GOV.UK (www.gov.uk)

HMRC have introduced a triage facility to help members decide whether they need to use the full calculator and submission service or not. They will be asked a series of questions about their specific circumstances. The service will then confirm whether further action is needed. Not all members will need to use this service. If you are affected by the Annual Allowance, XPS pensions should provide you with the details of your adjusted pension figures to allow you to enter this into the HMRC portal.

You can fill in this portal whether you have a Government Gateway account or not. If you are logged in to your Government Gateway account you will have the chance to save your progress and return to it later. If you do not have an account you can register for one at HMRC online services: sign in or set up an account: Sign in to HMRC online services - GOV.UK (www.gov.uk)

Following on from our update to you in June, the LGA have now advised that they have begun lobbying ministers for the written ministerial statement that Services need to progress those cases impacted by the ongoing tax issue. HM Treasury have assured the LGA that the issue has been given a high priority by ministers.

Please also find below a further update from our pension administrator XPS pensions.

June 2024 - McCloud Police Fire Immediate Choice Update

Update on HMRC tax portal

HMRC have been having a number of issues with the online portal and have currently closed this until further development and testing can be carried out. They anticipate that the portal will be available again in September 2024. If you are provided with a tax statement when you receive your retirement figures, and you need to make a submission to HMRC in the meantime, you can email publicservicepensionsremedy@hmrc.gov.uk with ‘PSPR submission request’ in the subject line, or call 0300 123 1079 and choose Option 1 to speak to the HMRC pensions team.

Within the body of the email, you should make it clear that you need to make a remedy submission for the Firefighters’ Pension Scheme, providing the following details: 

• full name, 

• email address, and 

• telephone number 

A member of the dedicated HMRC remedy team will then contact you and go through the manual submission process, this will involve the member completing a manual submission form (provided below) and you will need to have the relevant PSTR reference number (which we can provide to you) along with the information listed on GOV.UK webpages Calculate your public service pension adjustment - GOV.UK (www.gov.uk).

Interim Manual Submission Form

XPS pensions have provided an updated position statement for members:

Progress update

Following an update from LGA on 7^th June, we have been made aware of a new tax issue which affects immediate choice members who took the maximum lump sum with a tax charge when they retired.

The LGA, alongside unions and the Scheme Advisory Board are working with HM Treasury to try to resolve this matter as quickly as possible. The FBU have released a circular outlining the issue which you can find at Pensions update: Remediable Service Statement | Fire Brigades Union (fbu.org.uk)

We will be writing to all unprotected/taper protected immediate choice members to inform them if they are affected.

Following the pensioner meeting on Monday 20^th May, please find below a copy of the slides presented at the meeting along with a copy of the questions and answers from the session.

Pensioner Meeting 20th May 2024 presentation

Scheme Advisory Board Letter to HMT

FF Competent Pension Examples - Unprotected and Taper Protected

McCloud FAQs