Pension savings statements (PSS)

October is not only halfway through the fiscal year, but also the time clients may receive pension savings statements (PSS). 

1. What is PSS?

A standard PSS provides the total amount of the pension inputs made to the scheme for the most recently completed tax year, the total amount of pension inputs made to the scheme for each of the pension input periods ending in the previous three tax years (for 2015/16 this will be shown separately for the pre and post-alignment periods), and the amount of the standard annual allowance for the previous three years.

If the member has flexibly accessed their pension benefits, they may receive a money purchase pension savings statement - if total money purchase inputs exceed the money purchase annual allowance (MPAA). 

In some circumstances it is mandatory for a scheme to provide a member with a PSS, otherwise a member can request a PSS.

2. When is a PSS produced?

When will a client automatically receive a PSS from their scheme? 

There are two prompts which require a scheme to automatically provide a PSS for a completed tax year: 

1. The pension input amounts to the scheme, in the tax year, exceeded the standard AA, or 
   
   

2. The scheme administrator believes the individual has flexibly accessed benefits and money purchase input amounts to the scheme, in the tax year, exceeded the MPAA

Deadline for providing a PSS which is required automatically 

The member must be given a PSS for the relevant tax year by 6 October following the end of that tax year. 

Some schemes require the scheme administrator to receive information from another person, e.g. an employer, to allow the pension input amount to be calculated. There are regulations covering the specific information to be provided to the scheme administrator. In the event the scheme administrator has not received this information on time, the deadline for giving the PSS to the member is extended to three months from the day the scheme administrator receives the required information. 

Deadline for providing a non-mandatory PSS requested by the member

The scheme administrator has until the later of: 

• three months following receiving the member request, and

• 6 October following the end of the tax year

(but subject to the same caveat above where the scheme administrator relies on information from another person to calculate the pension input amount). 

Scheme administrator reporting requirements

Importantly, where a scheme automatically sends a PSS to a member, part of the HMRC requirements means they also have to let HMRC know a PSS was sent. This means that HMRC could anticipate the member reporting a tax charge through self-assessment. 

3. Does receiving a PSS always mean there’s a tax charge?

Members should not assume receiving a PSS is telling them they have a tax charge to pay. This is not always the case. It can simply mean the scheme have sent it to comply with their own HMRC reporting requirements.

An automatic Pension Savings Statement (PSS) from the scheme warns the member their pension input amounts may have exceeded their annual allowance. An individual scheme cannot know if a member has any available carry forward so they are unable to work out if a tax charge applies. This is the member’s responsibility.

Where a PSS is received automatically, this is a prompt for them to check their annual allowance position and report any excess amount and tax charge if required.