High-earning NHS pension scheme members are being warned about delays in getting statements of benefits ahead of the April deadline for claiming fixed protection.
In March last year, Money Marketing revealed that up to 100,000 public sector workers could be better off opting out of generous final-salary pension arrangements as a result of Government pension tax regime reforms.
Under changes announced in October 2010, the annual allowance for pension saving was slashed from £255,000 to £50,000 from April 2011. The lifetime allowance will be reduced from £1.8m to £1.5m from April this year.
Contributions over the annual allowance incur a tax charge of 50 per cent while contributions that are over the £1.5m lifetime allowance will be taxed at 55 per cent.
Anyone who wants to apply for fixed protection on their pension fund or opt out from the scheme altogether needs to do so before April 5.
However, IFAs say the NHS superannuation scheme is taking at least three months to respond to requests for a statement of benefits.
Standard Life head of pensions policy John Lawson (pictured) says: “Getting statements of benefits from the NHSSS is proving a problem. IFAs say it is taking a minimum of three months, so anyone wanting to claim fixed protection or opt out needs to put in a request no later than this week.
“Anyone who does not protect their fund and continues to contribute into the pension scheme could face an enormous tax charge.”
Richard Jacobs IFA director Richard Jacobs says: “We have not been able to get any information out of the NHS. This is a potential calamity waiting to happen. I have had to put so many disclaimers in my letters to clients on this subject that the advice is not worth the paper it is written on.”