The Teachers' Superannuation (Scotland) Amendment Regulations 1997

Explanatory Note

(This note is not part of the Regulations)

These Regulations make further amendments to the Teachers' Superannuation (Scotland) Regulations 1992 (S.I. 1992/280) (“the 1992 Regulations”).

Regulation 3 is consequential on regulation 27, which substitutes a new Part G of the 1992 Regulations.

Regulation 4 amends regulation B5 of the 1992 Regulations to provide that someone may not re-enter the teachers' pension scheme as a contributor while in receipt of a pension under the scheme.

Regulation 5 amends regulation C3 of the 1992 Regulations to enable employers to purchase additional service on behalf of teachers under the scheme’s arrangements for purchase of past added years. The amendment also enables part-time teachers to purchase past added years by means of instalments, a facility which was previously available only to full-time teachers.

Regulation 6 amends regulation C8 of the 1992 Regulations to enable the Secretary of State, in the context of the scheme’s arrangements for purchase of current added years, to determine the salary that would have been payable during the absence from reckonable service.

Regulation 7 amends regulation C10 of the 1992 Regulations so that a teacher will be entitled to a return of contributions in any case where he leaves the scheme without having qualified for retirement benefits. Also the waiting period following which he is entitled to a return of contributions is reduced from 3 months to 1 month for all teachers.

Regulation 8 is consequential on regulation 27.

Regulation 9 amends regulation C13 of the 1992 Regulations so that where a teacher repays previously withdrawn contributions by instalments these no longer require to be of equal amounts. An amendment is also made to clarify how the 15% contributions limit is applied when a teacher is repaying previously withdrawn contributions by instalments.

Regulation 10 inserts into regulation D3 of the 1992 Regulations the mechanism necessary to enable a part-time teacher who purchases added years by instalments to buy added years equal to those he could have purchased by instalments if he had been a full-time teacher.

Regulation 11 amends regulation E5 of the 1992 Regulations in order to introduce a requirement that entitlement to incapacity benefits is established only if the teacher has not been removed from the register of teachers, and is not being considered for such removal, on the grounds of misconduct, or in the case of an unregistered teacher he has not been dismissed for misconduct. The amendment also makes it clear that part-time teachers who have not elected to join the scheme are able to retire prematurely in the same way as teachers who have opted out of the scheme, provided that all criteria regarding qualification are satisfied. The amendment also provides that a teacher can receive early payment of retiring allowances on grounds of redundancy or the employer’s efficiency only with the employer’s specific agreement, and not if he is also receiving discretionary compensation for termination.

Regulation 12 amends regulation E6 of the 1992 Regulations so as to provide for the actuarial reduction of the retirement pension payable in cases of early retirement on grounds of redundancy or the employer’s efficiency where entitlement arises after 31st August 1997. The percentage reduction applicable to each age is set out in Schedule 3. The actuarial reduction does not apply where notice of termination of employment was given prior to 22nd October 1996 (the date of consultation on the amendment).

Regulation 13 amends regulation E7 of the 1992 Regulations so as to provide for the actuarial reduction of the lump sum in the same circumstances as those where regulation 12 applies.

Regulation 14 amends regulation E10 of the 1992 Regulations to make it clear that mandatory compensation paid by employers in cases of premature retirement is not dealt with as a duplicate pension.

Regulation 15 amends regulation E11 of the 1992 Regulations, as a consequence of regulation 12.

Regulation 16 provides that regulation E14 of the 1992 Regulations, which provides for suspension of incapacity pensions where a teacher ceases to be incapacitated, applies only to those who were entitled to an incapacity pension before 1st April 1997.

Regulation 17 provides that, where a person becomes entitled to an incapacity pension on or after 1st April 1997, if he returns to teaching he will cease to be entitled to the pension.

Regulation 18 amends regulation E15 of the 1992 Regulations, so that the abatement provisions relating to re-employment have applied to them the same actuarial reduction as is applied to the retirement benefits. The amendment also provides that the abatement provisions apply to a person who is not in pensionable employment because he is already in receipt of a pension (in consequence of regulation 4).

Regulation 19 amends regulation E16 of the 1992 Regulations, dealing with retiring allowances on a second or subsequent retirement, so that actuarial reduction applies as under regulations 12 and 13.

Regulation 20 provides that where a teacher is granted ill-health benefits in exceptional circumstances of ill-health the Secretary of State may commute the ill-health pension to a lump sum. He may not, however, commute the guaranteed minimum pension element, nor does the commutation affect the value of the spouse’s pension in any way.

Regulation 21 amends regulation E19 of the 1992 Regulations to enable a death gratuity to be paid in certain cases where a teacher dies within 2 months of leaving pensionable employment. The amendment also increases the amount of the death gratuity, in all cases of death occurring after 31st March 1998, and clarifies that the nomination of someone to receive the death gratuity must be of an individual.

Regulation 22 makes amendments to regulation E20 of the 1992 Regulations which are consequential upon regulations 12 and 13. It also clarifies that the nomination of someone to receive the deficiency grant must be of an individual.

Regulations 23 and 24 amend regulations E23 and E24 of the 1992 Regulations to provide for the payment of short-term pensions to children in their own right irrespective of their relationship to any adult who may also be entitled to a short-term pension. Regulation 24 also provides for actuarial reduction where appropriate.

Regulation 25 provides for the payment of interest, where there has been a delay exceeding one month in the payment of pension benefits, other than in cases where the beneficiary has made payment impractical.

Regulation 26 amends regulation F3 of the 1992 Regulations so that application for an inward transfer value does not require to be made within a year of entering pensionable employment.

Regulation 27 and Schedule 1 substitute a new Part G for the existing Part G of the 1992 Regulations, dealing with the finance of the scheme. Under the existing Part G a teachers' superannuation account is kept, showing actual receipts and payments and interest on notional scheme investments. The Government Actuary reports periodically on the finances of the scheme and employers' contributions are fixed accordingly. The new Part G implements changes requiring the cost of pensions increases under the Pensions (Increase) Act 1971 to be debited to the account and allowing notional investment returns to be credited to the account according to the average return of very large pension funds. Although these changes are to be made by reference to the accounts from 1st April 1991, they will affect employers' contributions only from a future date.

In new Part G, regulation G1 preserves the effect of the old Part G for certain transitional purposes. Regulation G2 provides for the making of a supplemental actuarial inquiry as at 31st March 1991, parallel to the existing actuarial inquiry as at that date, to determine what contributions would in theory be required to finance the scheme on the new basis until the end of the financial year after the report of the 1996 actuarial inquiry. Regulation G3 provides for the continued keeping of teachers' superannuation accounts, and for the preparation of shadow accounts for the financial years beginning 1st April 1991 to 1st April 1995, parallel to the existing accounts for those years, showing receipts and payments on the new basis. Regulation G4 and regulation G6 specify the receipts and payments to be entered into the accounts and shadow accounts. Regulation G5 provides for special credits to the shadow account as at 1st April 1991. Regulation G7 provides for the making of an alternative actuarial inquiry based on the position of the shadow account as at 31st March 1996, parallel to the actuarial inquiry into the actual account as at that date. The report of the alternative actuarial inquiry is to specify the contributions which should be paid, beginning at 1st April following the report, to meet payments on the new basis. As from 1st April following the report, employers' contributions will be determined on this basis. Up to then they will still have been determined on the existing basis under old Part G. Regulation G8 provides for actuarial inquiries in 2001 and each 5 years thereafter, regulation G9 provides for employers' contributions based on the reports of those inquiries and regulation G10 provides for payment by employers to the Secretary of State of any sums due.

Regulation 28 and Schedule 2 provide for the 1992 Regulations to be modified in order to protect the pension rights of former members of the National Health Service Superannuation Scheme who transferred to the teachers' scheme as a consequence of the transfer of responsibility for nursing and midwifery education to educational institutions. Regulation 1 provides for this to have retrospective effect from 1st September 1996. Retrospection is authorised by section 12(1) of the Superannuation Act 1972.

Regulation 29 amends regulation H6 of the 1992 Regulations so that a determination of the Secretary of State is no longer final. This is consequential upon the extended jurisdiction of the Pensions Ombudsman.

Regulation 30 inserts into Schedule 1 to the 1992 Regulations a definition of “Appropriate factor”, in the context of the actuarial reduction provisions of regulations 12 and 13. The individual factors, according to age and to whether the person was an NHS employee referred to in regulation 27, are listed in Schedule 3 (which inserts into the 1992 Regulations a new Schedule 9A). Regulation 30 also amends the definition of “incapacitated” in Schedule 1 to the 1992 Regulations, so that entitlement to incapacity retirement benefits is dependent upon an injury or illness being likely to be permanent.

Regulation 31 makes technical amendments to Schedule 4 to the 1992 Regulations to enable the calculation of outstanding contributions where a part-time teacher purchases added years by instalments and does not complete payment. It enables part-time teachers to buy part or all of the remaining past added years by lump sum payment so that the total service purchased is the same as it could have been had they been employed full-time.

Regulation 32 removes a restriction in paragraph 6 of Schedule 5 to the 1992 Regulations, whereby a teacher who was paying additional contributions to buy extra service under the previous “added years” provisions could not make a past added years election without first terminating the old election.

Regulation 33 amends Schedule 6 to the 1992 Regulations, to enable part-time teachers to pay additional contributions by instalments to purchase additional family benefit provision.

Regulation 34 amends Schedule 7 to the 1992 Regulations, to enable the calculation of a “paid up credit” where a part-time teacher has paid added years contributions by instalments and has not completed payment.

Regulation 35 inserts a new provision into Schedule 8 to the 1992 Regulations, to make it clear that teaching service in the British Isles counts for qualification purposes.

Regulation 36 provides for tables of actuarial reductions related to regulations 12 and 13. The tables are in Schedule 3 (which inserts into the 1992 Regulations a new Schedule 9A).

Regulation 37 amends Schedule 10 to the 1992 Regulations so that the amount of retirement pension which may be allocated is not reduced as a consequence of actuarial reduction of that pension.

Regulation 38 amends Schedule 11 to the 1992 Regulations, in order to define the means by which a teacher who has been subject to mis-selling may be re-admitted to the teachers' scheme and reinstate all of his previous teaching service. It defines how a compensation payment is calculated to enable previously transferred-out teaching service, and the period during which he was in opted-out service, to be transferred back into the teachers' scheme.

Regulation 39 is consequential on regulation 27.

Regulation 40 makes transitional provisions, and regulation 41 provides for teachers to elect to disapply any amendment which would place them in a worse position than they would have been in had these amendments not been made.

Any other amendments not specifically mentioned are minor or consequential.