SCOTTISH TRANSPORT GROUP PENSION FUND

SUMMARY INFORMATION BULLETIN - JULY 2002

Progress Since December 2001 (Last Bulletin)

• STG Pension Schemes were formally wound up on 30 April 2002 and the Trustees discharged.
• Ownership of the pension scheme records has passed to Scottish Ministers and the Scottish Public Pensions Agency (SPPA) now has full access to those records.
• The Scottish Bus Group has been placed in liquidation and the Scottish Transport Group has been dissolved. All assets and liabilities, including the pension funds surplus have been transferred to the Scottish Executive.
• The net pension fund surplus was of the order of £176 million.
• As of November 2001 Scottish Ministers had agreement to distribute £118 million to pension scheme members with £50 million being returned to HM Treasury.
• Following discussions between Scottish Ministers and HM Treasury a further £8 million was retained for distribution bringing the total to £126 million.

Tax Position

• The SPPA again raised the matter of the tax charge on individuals ex-gratia payments with the Inland Revenue. The Inland Revenue maintained its view that individual ex-gratia payments will be subject to tax depending on individuals’ tax circumstances.
• The ex-gratia payments will be taxed at source. Therefore the payments received by individuals will be net of tax. (Note this is different from previously reported)

• Individuals who do not pay income tax will be required to claim back the tax deducted at source. Information on how to claim back tax will be included with payments.

• The SPPA also asked the Inland Revenue to consider whether there was a case for payments up to a £30,000 ceiling to receive a tax exemption. The Inland Revenue has confirmed that the £30,000 exemption only applies to the redundancy regime and that such an exemption cannot be applied in this case.

The Next Stage

• The SPPA now has full access to pensions records which are being updated with the address information many of you have supplied us with.

• The SPPA will write to individuals around the end of July with an indication of their payment based on the pension scheme records. Full details of the process and the agreed criteria for distribution will be enclosed with the letter. Individuals will be asked to confirm their eligibility by returning a short form.
• As soon as individuals return these forms to the SPPA their payments will be authorised. Disputed payments will take longer to resolve.

• Payments to individuals should therefore begin in August 2002.
• Eligible members will receive two payments. The bulk of the money will be paid out through the initial payments with a further payment made at a later stage once any disagreements over data have been resolved.

• The SPPA will be running a media advertising campaign which will be timed to coincide with letters being sent to individuals. The purpose of the advertising is to cast the net widely for those who think they may be eligible but have not received a letter from the Executive by a specific date. A contact address and telephone number will be included in the advertising.

Further Information

Details regarding the value of individuals’ payments will not be available until letters are sent out around the end of July. For reasons of confidentiality SPPA staff cannot discuss the value of individual payments over the telephone. Once letters have been sent out to individuals a telephone helpline will be operational which will enable individuals to discuss direct with the SPPA their data and any disagreement regarding the information supplied. The telephone helpline number is 01896 893 090.

Individuals who believe that the STG Pension Schemes might not hold details of their current address are invited to write to the SPPA at the following address:

Scottish Public Pensions Agency
STG
7 Tweedside Park
Tweedbank
Galashiels
TD1 3TE

Please provide the following details: Full Name, Pension Scheme, National Insurance Number, Date of Birth and current address. Alternatively you may wish to complete and return the attached form to the above address (STG Form)

If you have recently completed and returned a form to the Scottish Executive your address will have been recorded.

Individuals who are uncertain whether they are eligible for a payment may refer to the attached criteria for distribution. (Distribution Criteria: July 2002)

Whilst SPPA have made every effort to trace potential beneficiaries, there are still around 600 people who may be eligible and have not yet contacted them. A list of potential beneficiaries can be found on the following web site www.sppa.gov.uk/scot_transport/home.htm

Website: http://www.scotland.gov.uk/transport/stgpf/