Audience: This Notice will be of particular interest to:
Action: To note correct procedures for paying added year contributions whilst on a career break
Timing: Immediate
The purpose of this EPN is to clarify the policy on buying added years while on a career break.
Before A-day (6 April 2006) it was not possible for a member to continue to pay for added years while on career break. Instead, the member had to pay their contribution by lump sum or by instalments, as agreed with the scheme administrator, when they returned to work. From 6 April 2006 this changed, so now members on career break who want to continue to make payments to their added years contract can do so whilst they are on career break. No employee can start a new added years contract from 1 March 2008.
Please ensure that any member of staff going on a career break who wants to carry on contributing towards an existing added years contract knows that they can make ongoing monthly payments to their APAC. The member should be told to talk to their pensions administrator to organise this payment. Pension contributions (including in respect of added years) normally attract tax relief provided that they do not exceed the greater of (a) the member’s taxable earnings1 in the tax year and (b) £3,600. Tax relief is normally provided at source, through the payroll, but members who wish to make payments while on an unpaid career break will need to claim tax relief direct from HMRC.
The option for the member to pay by lump sum, or by increased monthly contributions covering the period of the career break, following their return to work is still available.
This document supplements EPN113
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Employer Helpdesk
Civil Service Pensions
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