We met DCC Alan Speirs just before the summer holidays to discuss our dispute over interest on
pension contribution due to remedy. We were clear what we were looking for from this for our
members would be that contributions owed would be frozen and can be repaid when members
retire, before any tax is taken from them.
What was encouraging was that, when this was consulted on publicly back in 2020, the Service
actually agreed with us and said that interest shouldn’t accrue for officers. So what we’re hoping for
is to achieve a position where both the Service and our own views are aligned. After that, it is only a
matter of overcoming how it will be funded and technically delivered.
DCC Speirs has committed to go away and look at, with colleagues and finance, what the associated
costs are likely to be. There’s clearly two ways that you could approach it. The most efficient way
would be for the service just to say, ‘We’ll pay all contributions owed right now and then no interest
will accrue, and officers can pay us back as they retire’. However, that obviously a significant amount
of money ‘up front’.
So although it’s technically more costly over time, it may actually be easier for the service to pay it
back on a year-to-year basis. If 700 people retire a year, then you would pay off the interest only, just
to those 700 people, which will be a much smaller amount and could be more manageable.
So that’s ultimately for the service to go away and have a look at that, and then come back to us and
see what the art of the possible is. We are aiming for a further meeting this month, to hear more.
At the end of August, we should be given remediable service statements (RSS), which is the
statement that effectively moves you back onto your original pension scheme for the remedy
period.
We’ve got some real concerns around about the impact on members for tax reconciliation, because
it’s still not clear what the process is going to be around about that, or what support is available for
them. The previous version of the HMRC calculator wasn’t fit for purpose. People couldn’t use it. So
this is something we are warning about.
We’ve been warning the Scottish Public Pensions Authority (SPPA) for some time about the impact
that this is going to have on members. We will be informing members about how this affects them in
due course. Once we know more, I’ll ensure you know more, so look out for further updates.