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GMP Rectification FAQ's


Following an announcement by the Govt (HMRC) that contracting out would cease, the Fund began the process of reconciling its records and agreeing figures with HMRC. The Fund will be contacting all affected members individually and appreciate your patience and understanding with us whilst we carry this out, however in the meantime please find below some frequently asked questions to provide you with some additional clarity.


1)      Will my tax liability be reduced at the same time and will I receive notification of the change?

A)    The rate of tax you must pay is notified to the Pension Fund by HMRC. If for example,  you are on a BR code with the WPF (Wiltshire Pension Fund)  your tax charge will be 20% above any personal allowance you may have. Following the month of change you will be taxed at the same rate, but it will be on the new amount of your monthly pension. Where a change of more than £5 per month is made to your pension,  it is our payroll department's policy to issue you with a payslip detailing the change made.


2)      How do I know my new pension in payment is correct?

A)     A complete review of the history of your pension payments has been undertaken to ensure that your pension in payment going forward continues to be calculated and paid in accordance with the LGPS (Local Government Pension Scheme) Regulations. Any pensioner affected by this exercise can contact Fund officers to request additional information to reassure them that their new pension in payment is correct.   


3)      How did this situation occur?

A)     Your pension on retirement was calculated in accordance with the benefit structure of the Fund. However, in order to calculate your pension in accordance with this,  the Fund receives data from a variety of sources. One of these sources is HMRC, who on cessation of the contracting out requirements in 2016 provided all Pension Fund's in the UK with copies of the Guaranteed Minimum Pension (GMP) data they hold. This allowed Funds, including the Wiltshire Pension Fund, to review their own records containing the information previously provided to them. It was during this process that a number of pensions in payment were identified as holding incorrect information, which in turn has led to adjustments needing to be made to a number of pensioners pensions.

4)      What is contracting out?

A)     The Pension Fund had an integrated relationship with your State Pension arrangements. In practice, this meant that on entry to the Pension Fund, both you and your employer agreed to pay lower national insurance contributions and in return you effectively agreed to not participate in the State Second Scheme (S2P), formerly known as the State Earnings Related Pension Scheme (SERPS) for that period of employment. As a result of this fundamental contracting out agreement the Fund promised that it would broadly speaking pay the equivalent value of your S2P through its own benefit structure. This equivalent value is known as the Guaranteed Minimum Pension (GMP).


5)      Why did it take so long to come to light?

A)     Following an announcement by the Govt (HMRC) that contracting out would cease with effect from 5th April 2016, the Fund began the process of reconciling its records and agreeing figures with HMRC. However, being a national exercise, this affected not only the Wiltshire Pension Fund, but also all Pension Funds who had agreed to contract out from the State Second Scheme since 1978. Therefore HMRC's records were continually being updated based on responses from other Funds until HMRC finally closed the window for agreeing different figures and the Fund could confirm its final position in relation to each member. Furthermore, the process for revaluing pensions in payment is highly complex and can mean that different members receive different levels of increases. As such this has been a lengthy exercise to complete, however the Fund is now at a point at which it is now required to write to any pensioners affected by this exercise and notify them of any the changes due to their pension.


6)      I'm divorced, does this affect my pension sharing order?

A)     It is recommended that you review the terms of your pension sharing order and where appropriate take legal advice. Please note that the Fund will be required to abide by the existing court order until we receive a new instruction from the Court.


7)      Am I affected by this because I took early retirement before state pension age?

A)     No. As indicated in Answer 3, this review of your pension is not related to the reason for your retirement, or the way in which your pension is calculated.  


8)      I'm receiving a pension from another local authority pension Fund, will this also be affected?

A)     The Wiltshire Pension Fund cannot comment on the work being undertaken by other administering authorities in respect of this exercise. We suggest that you contact your other LGPSdirectly in order to find out whether this exercise will affect your pension with them.   


9)      Where a reduction in a pensioner's pension has caused financial hardship, what support will the Pension Fund offer?

A)     Prior to contacting affected pensioners in payment, the Fund made a number of policy decisions. One was a decision not to reclaim any overpayments where it was apparent that a pensioner concerned would not have been aware they were being overpaid. The intention of this decision being, to minimise the impact on affected members. Secondly, was the decision to communicate pension adjustments a month in advance of the proposed adjustment, to allow affected pensioners the time to consider any financial changes that they may need to make. However, where financial hardship does occur in specific circumstances, such as a request by the Fund to reclaim an overpayment of pension, Fund officers will review such cases on an individual basis.


10)   A Pension Fund pensioner is receiving Adult Social Care financial support from Wiltshire Council. How will the change to their pension affect this support?

A)     It is recommended that you contact the Council's Adult Social Care team directly and advise them of your change in income. Where a change to your financial support is established Pension Fund officers will work directly with the Council's Adult Social Care team to provide them with any information, they need to reassess yourcase. Please ask your relevant Adult Social Care contact to contact Pension Fund officers.


11)   A Pension Fund pensioner is receiving pension credits, how will this affect those pension credits?   

A)     It is recommended that you contact the Pension Credit department directly to begin the process for reassessment. Further information and contact details can be found on their website HERE. Where the Pension Credit team require information concerning your Wiltshire pension we will arrange for it to be forwarded to you.


12)   Am I now eligible to claim pension credits due to an adjustment in my pension?

A)      We recommend you visit the Pension Credit website directly to find out if you are eligible , a link to their website can be found HERE.  

13)   The tax office changed my tax code following notification from the Wiltshire Pension Fund that my pension had changed?

A)      The rate of tax you will pay will be notified to the Pension Fund by HMRC. In all situations, particularly where HMRC has issued the Pension Fund with a Month 1 notification of tax liability, you will need to liaise with the Tax Office in order to correct the amount of tax deducted from your new monthly pension in payment. The Pension Fund's Tax Office contact details can be found on your payslip. The Pension Fund's payroll department will be unable to alter the amount of tax it deducts from your pension without further notification from the Tax Office.


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