The clock ticking down to the end-of contracting out is getting louder and louder. With just over a year to go, many trustees and administrators are getting their houses in order by completing the reconciliation of their records with those held by HMRC. However, many more are not. A recent estimate indicated that, on average, around 5,000 data queries a day would need to be resolved in order to complete reconciliations in the desired timescale.
For contracted-out schemes that are already closed to build up of future benefits, there are no excuses for brushing reconciliation exercises under the carpet. Schemes which are open to accrual can also progress matters in advance of the end of contracting-out on 6 April 2016, using HMRC’s Scheme Reconciliation Service.
This is an exercise that must be done and trustees and administrators should take immediate action to complete any outstanding tasks. The resource in an already stretched HMRC team will wither on the vine from 2016 until December 2018 when all individuals will be written to confirming their contracted-out pension entitlements. Failure to act now may leave schemes carrying additional liabilities which they cannot prove belong elsewhere. It is therefore also in employers’ interests that trustees complete the required tasks. Read more »