Taxation issues are the biggest source of inquiries for HR departments from members of company pension schemes, new research from employee benefits consultancy Portus shows.
Two out of three (67%) HR departments say they have dealt with general tax inquiries, outstripping questions about fund values that have been dealt with by around 60% of HR departments, the study shows.
However, lifetime pension allowances – which were cut to £1 million in April this year from £1.25 million – and annual contribution allowances – currently set at £40,000 but reducing to £10,000 for employees earning between £150,000 and £210,000 – are also generating substantial numbers of inquiries.
Around 45% of HR departments have received inquiries about lifetime allowance issues and 37% about annual allowance issues.
HMRC figures show the number of taxpayers who are exceeding the annual allowance is rising – 1539 people paid a tax charge in the 2015/16 tax year for breaching the £1.25 million allowance generating a total of £126 million compared to 1482 the previous year generating £78 million.
Portus Consulting Commercial Director Steve Watson says: “Tax issues are highly complex and employees may not know what their annual allowance or lifetime allowance is until the end of the tax year.
“HR departments face a wide range of issues and keeping on top of pension taxation rules is yet another challenge which can lead to problems if called upon to provide detailed advice.
“Retirement planning however is clearly becoming a major part of the job for HR departments, highlighting the need for solutions which can address employee concerns.”
Just one in five (21%) HR departments say they have received inquiries about pension performance issues while 14% have dealt with inquiries about State Pension entitlements.