New regulations to replace regulation E18
10. For regulation E18, substitute—
“Interpretation: abatement of pension
E18. In this regulation and regulations E18A to E18D—
“abatable pension” means the sum of a teacher’s retirement pension—
disregarding the effect of any reduction under regulation E18D; and
excluding—
phased retirement pension;
additional pension;
a pension (or part of a pension) which is payable to the teacher by reason of retirement with actuarial adjustment applying to the teacher’s reckonable service; and
retirement benefits defined in and payable under the Teachers’ Pension Scheme (Scotland) (No. 2) Regulations 2014(1);
“adjusted salary of reference” for a teacher is—
if the teacher’s previous employment was full-time, the higher of—
the highest salary taken into account in determining the teacher’s pensionable salary under regulation E34 or E34A(2), multiplied by the adjustment factor; or
(if applicable) the highest salary taken into account in determining the teacher’s pensionable salary under regulation E34 or E34A relating to the teacher’s further employment, multiplied by the adjustment factor;
if the teacher’s previous employment was part-time, the higher of the full-time equivalent of—
the highest salary taken into account in determining the teacher’s pensionable salary under regulation E34 or E34A, multiplied by the adjustment factor; or
(if applicable) the highest salary taken into account in determining the teacher’s pensionable salary under regulation E34 or E34A relating to the teacher’s further employment, multiplied by the adjustment factor;
if the teacher becomes entitled to a further retirement pension during a tax year, and the salary of reference for the teacher’s employment immediately prior to the further retirement (“the new higher salary of reference”) is higher than that for the previous employment (“the existing salary of reference”), the sum of—
the existing salary of reference divided by 365 multiplied by the number of days from the beginning of the tax year to the day before the further retirement; and
the new higher salary of reference divided by 365 multiplied by the number of days from the date of entitlement to further retirement benefits to the end of the tax year;
“adjustment factor” for a salary is the amount (if any) by which, immediately before the first day of the employment, that salary would have increased if it had been the annual rate of an official pension as defined in section 5(1) of the 1971 Act, beginning and first qualifying for increases under that Act, on the same date as—
the last day of employment at that salary, in a case where the pensionable salary was determined under regulation E34;
the retirement pension, in a case where the pensionable salary was determined under regulation E34A;
“initial adjusted salary of reference” is a teacher’s adjusted salary of reference divided by 365 and multiplied by the number of days in the initial period;
“initial period” is that part of a tax year running from a teacher’s entitlement day in respect of retirement benefits and ending at the end of the tax year;
“pension receipts” means the sum of a teacher’s retirement pension—
including—
phased retirement pension;
a pension (or part of a pension) which is payable to the teacher by reason of—
retirement on or after reaching normal pension age;
premature retirement; or
early retirement with actuarial adjustment applying to the teacher’s reckonable service and to mandatory and discretionary compensation for premature retirement under the Teachers (Compensation for Premature Retirement and Redundancy) (Scotland) Regulations 1996(3);
an ill-health pension which began to be paid before 1st April 1997, including where the annual rate of the pension has been reduced to zero because the teacher entered full-time employment or ceased to be incapacitated (as referred to in regulation E14(1) of the Teachers’ Superannuation (Scotland) Regulations 1992(4));
retirement benefits defined in and payable under the Teachers’ Pension Scheme (Scotland) (No. 2) Regulations 2014; and
excluding additional pension; and
“salary” means—
contributable salary;
pensionable earnings as defined in Chapter 4 of Part 3 of the Teachers’ Pension Scheme (Scotland) (No. 2) Regulations 2014.
Scope of abatement of retirement pension following further employment
E18A. Regulation E18B applies to a teacher to whom retirement benefits have become payable and who is employed—
(a)in pensionable employment, comparable United Kingdom service or employment which would have been pensionable but for—
(i)the teacher having made an election under regulation B7 (election for employment not to be pensionable); or
(ii)the teacher having reached the age of 75; or
(b)in part-time or full-time employment which is not pensionable employment which falls within regulation B6.
Abatement of a retirement pension following further employment
E18B.—(1) Where this regulation applies to a teacher and the teacher is in an initial period—
(a)if the teacher’s salary in the employment during the initial period equals or exceeds the teacher’s initial adjusted salary of reference, no abatable pension is to be paid in that tax year;
(b)in any other case, the abatable pension to which the teacher is entitled in the initial period is to be paid only in respect of X number of days, where—
and where—
A is the amount by which the teacher’s salary in the employment during the initial period falls short of the teacher’s initial adjusted salary of reference; and
B is the total of the teacher’s pension receipts for the initial period divided by the number of days in the initial period.
(2) Where this regulation applies to the teacher and the teacher is not in an initial period—
(a)if the teacher’s salary in the tax year equals or exceeds the teacher’s adjusted salary of reference, no abatable pension is to be paid in that tax year;
(b)in any other case, the abatable pension to which the teacher is entitled in that tax year is to be paid only in respect of X number of days, where—
and where—
A is the amount by which the teacher’s salary in the employment during the tax year falls short of the teacher’s adjusted salary of reference; and
B is the total of the teacher’s pension receipts for the tax year divided by 365.
Method of abatement
E18C.—(1) Where the abatable pension of a teacher falls to be reduced—
(a)under regulation E18B(1), paragraph (2) applies; or
(b)under regulation E18B(2), paragraph (3) applies.
(2) Where this paragraph applies, the Scottish Ministers are to pay the teacher’s abatable pension in accordance with regulation E36 (monthly and quarterly payments), without taking account of regulation E18B(1)(b), on the assumption that the teacher will remain in employment at the same salary for the remainder of the initial period.
(3) Where this paragraph applies, the Scottish Ministers are to pay the teacher’s abatable pension in accordance with regulation E36 (monthly and quarterly payments) without taking account of the reduction, until the abatable pension has been paid in respect of the number of days calculated in regulation E18B(2)(b), on the assumption that the teacher will remain in employment at the same salary for the remainder of the tax year.
(4) When the teacher’s abatable pension has been paid in respect of the number of days calculated in regulation E18B(1)(b) or (2)(b), paragraph (5) applies unless the teacher ceases to be in the employment, or is in employment at a lower salary, in which case paragraph (6) applies.
(5) If this paragraph applies, the Scottish Ministers are to pay no further payable abatable pension to the teacher in respect of—
(a)the remainder of the initial period, if regulation E18B(1)(b) applies; or
(b)the remainder of the tax year, if regulation E18B(2)(b) applies.
(6) If this paragraph applies the Scottish Ministers are to pay the teacher’s abatable pension during the remainder of the initial period or tax year, of such amount and at such times as is necessary in order to achieve the outcome described in—
(a)regulation E18B(1)(b) in respect of an initial period; or
(b)regulation E18B(2)(b) in respect of a tax year.
Recovery of overpaid pension
E18D.—(1) If the abatable pension paid in any tax year has exceeded the amount which should have been paid by virtue of regulation E18B and E18C, the difference between the amount which has been paid and the amount which should have been paid is an overpayment to which paragraph (2) applies.
(2) Where this paragraph applies, the overpayment is recoverable and (without prejudice to any other means of recovery) may be recovered in whole or in part by a reduction in the abatable pension paid in any subsequent tax year.”.