In advance of the anticipated abolition of contracting-out for defined benefit schemes from 6 April 2016, HMRC has published the first of its "Countdown Bulletins" which outlines the timeline to abolition and key milestones. HMRC intends to issue such bulletins on a regular basis regarding its activities in relation to the end of contracting-out. 

The bulletin, which can be viewed here (http://www.hmrc.gov.uk/nic/count-bull-contract1.pdf), highlights the following key points:

  • From April 2014, HMRC will offer a "Scheme Reconciliation Service" which is intended to help pension scheme administrators and trustees to reconcile their contracting-out records for non-active members with HMRC. Use of the service is not compulsory but HMRC stresses that it is the schemes' responsibility to ensure that their records are accurate. 
  • HMRC notes that, from 6 April 2014, employers will be legally required to show the relevant Scheme Contracted-out Number (SCON), in addition to the Employer's Contracting-out Number (ECON), when submitting contracted-out National Insurance Contributions for employees who have been in a contracted-out scheme during the relevant tax year.