Teachers' Pension Scheme: Rollback Choices (Faster Accrual)

Anon

hugheskevi said:

Anon said:

Relating to Additional Pension, if someone were to accept the compensation option, what happens to the tax treatment of the years where the payments were actually made? Do they get re-opened/recalculated for each year where Additional Pension was bought? Sorry if this has already been answered.

The tax position for past years all remains the same regardless of what is decided.

If compensation is selected, the calculation of the amount of compensation takes into account tax relief. For example, if a higher rate taxpayer paid £10,000 for Additional Pension in 2017/18 and selected the compensation option, the scheme would start the compensation calculation from £6,000 being owed in 2017/18 and apply interest to that figure to bring it up to the payment date.

Thank you. I think the concern was if the tax position for that year was revisited and the actual pension contribution made was taken out of the taxable income calculation, it would have other implications. For example, they would be back to being liable for the higher income child benefit charge, as they would technically be back into a higher tax bracket having had the pension refunded.