Cost Reimbursement

The cost reimbursement guidance is for individuals who are eligible for the McCloud 2015 Remedy and have pensionable service in the period between 1 April 2015 to 31 March 2022, known as ‘the remedy period’. 

An application for cost reimbursement may only be made by:

  • A remedy member
  • A personal representative of a deceased remedy member
  • A designated person who has power of attorney for a remedy member who is not deceased 

Claims for cost reimbursement will only be eligible if the reason for the loss falls under one or more of the following three categories: 

  1. The loss is attributable to a breach of a non-discrimination rule – this means the loss must be due to the discrimination that led to the remedy
  2. The loss is attributable to the application of the 2015 Remedy – this means the loss must have occurred due to the operation of the remedy itself
  3. The loss is a ‘Part 4 tax loss’ - this relates to charges and entitlements under Part 4 of the Finance Act 2004. See examples below under section ‘Types of claim’ 

Claims made under any of the categories above must be for a specific financial loss that is identifiable. For example, where a tax charge has been paid to HMRC before 6 April 2019 due to a breach of the annual allowance and as a result of the 2015 Remedy this tax charge would not have arisen. 

Types of claim 

Some claims may be paid automatically. These are: 

  • Eligible scheme members who bought additional pension in the 2015 scheme during the remedy period – members may choose receive compensation for the contributions they paid during the remedy period. SPPA will write to members to confirm their choice and then again to confirm when this will be paid.
  • Eligible scheme members who bought out the early retirement reduction in the 2015 scheme during the remedy period – members may choose receive compensation for the contributions they paid during the remedy period. SPPA will write to members to confirm their choice and then again to confirm when this will be paid. 

Other claims will require an application to be made to the scheme before any compensation payment is considered. There is no definitive list for all types of claims however it is expected that most claims will fall under one of the following categories: 

Accountancy services 

This is to reimburse the cost of engaging a qualified accountant to assist with the following areas of the 2015 Remedy: 

  • Calculating a new or revised tax charge following receipt of a RPSS
  • Supporting a tapered protection or unprotected member to complete a revised tax assessment
  • Supporting a member to complete information to use the HMRC digital service Reimbursement claims for accountancy services will be considered up to a maximum value of £1,000.00. 

Independent Financial Advice 

This is to reimburse the cost of engaging the services of a qualified independent financial advisor to help with particularly complex cases such as: 

  • Members who are entitled to Ill-Health benefits in the alternative scheme
  • Members who have lifetime allowance protections
  • Members who will have a new or revised tax charge as a result of their service returning to the legacy scheme
  • Members who have a pension sharing order
  • Members who have are considering making contingent decisions about their pension

Reimbursement claims for independent financial advice will be considered up to a maximum value of £500.00. 

Legal Services 

This is to reimburse specific cases where legal services must be undertaken, such as where a divorce or dissolution must be re-examined in light of changes to the value of benefits accrued during the remedy period.

Financial Loss 

This is to reimburse for a direct financial loss which has occurred as a result of the discrimination that occurred or due to the operation of the 2015 Remedy. 

Part 4 Tax Loss 

This is to reimburse for a tax loss relating to the operation of Part 4 of The Finance Act 2004 and the 2015 Remedy. This may come under the following categories: 

  • An overpaid annual allowance or lifetime allowance tax charge which occurred in an out-of-scope tax year
  • An overpaid lifetime allowance charge when taking into account restoration of lifetime allowance protections

Items that will not be considered for cost reimbursement

Claims for cost reimbursement cannot be made and will not be accepted for the following categories: 

  • Professional advice or services that could have reasonably been obtained from the Scheme Manager
  • Cases where a member has already received compensation for the loss in question (e.g. pursuant to a court order), or the compensatable amount has been used to reduce an amount owed by the member
  • An unauthorised payment tax charge on interest for arrears of pension or arrears of lump sum for an immediate choice member
  • An unauthorised payment tax charge on the arrears of lump sum due for an immediate choice member
  • Indirect or hypothetical financial loss as a result of an employment decision
  • An immediate choice member who was a tapered protection member where either of their choices for remedy benefits results in a lower set of benefits than those in payment
  • Fees for legal services incurred by a member in the case of litigation 

There may be other cases where the scheme manager will not accept the compensation claim. Where a claim for reimbursement is rejected the reasons for this decision will be explained and eligible members will be able to raise an appeal if they disagree with the decision. 

We are currently finalising the application process. Further guidance and information on how to apply is coming soon. In the meantime, you can sign up to get an email alert as soon as the application process is open: 

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