The Teachers' Superannuation (Scotland) Amendment Regulations 1998

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 1(2) provides for regulations 6, 7, 10, 13, 18(a), 24 and 25 to have retrospective effect from 6th April 1997. Retrospection is authorised by section 12(1) of the Superannuation Act 1972.

Regulation 4 inserts provisions (regulation C1A) whereby a teacher who is aged 50 or over, whether in full-time or part-time employment, whose salary is reduced or who takes up employment with a new employer at a reduced salary may, if the teacher satisfies certain conditions, elect to pay contributions at the previous rate of salary uprated by the retail prices index. These replace the previous regulation C1(8) to (13) which is deleted by regulation 3. The old provisions were not constrained by age, did not index-link the former salary and did not apply upon a change of employer.

Regulation 5 amends regulation C2 of the 1992 Regulations so that, where an election is made under regulation C1A, the teacher must pay employers' contributions on the difference between the old and new rates of salary, unless the employer or former employer elects to pay such contributions under regulation G9A.

Regulations 6 and 7 amend regulation E1 and replace regulation E2 respectively in relation to guaranteed minimum pensions to ensure that the 1992 Regulations comply with the new contracting-out regime which came into force on 6th April 1997. Regulation 10 amends regulation E26(7)(a) in relation to the change whereby a guaranteed minimum pension is payable only in respect of tax years up to and including 1996/97. This provision also ensures that the 1992 Regulations comply with the new contracting-out regime.

Regulation 8 amends regulation E14A (withdrawal of incapacity pensions), so that an incapacity pension is also withdrawn if a teacher returns to employment which would have been pensionable but for regulation B5(5). That latter provision prevents someone from re-entering the teachers' superannuation scheme as a contributor while in receipt of a pension.

Regulation 9 extends the provisions of regulation E18 of the 1992 Regulations so that pension benefits can be deferred, suspended or reduced where a teacher is convicted of certain types of offence not only in connection with pensionable employment but also in connection with employment which would have been pensionable had the teacher not exercised his right to opt out of the teachers' superannuation scheme.

Regulation 11 (which re-enacts with modifications regulation E29 of the 1992 Regulations) amends the provisions for determining a teacher’s pensionable salary, with the effect that for pensionable salary purposes regular part-time employment counts in the same way as full-time employment. Pensionable salary is to be calculated by reference to the salary for the best consecutive 365 days of pensionable employment (rather than reckonable service) during the last three years of pensionable employment (rather than reckonable service). The principal change made is that periods of reckonable service which are not pensionable employment are disregarded.

Regulation 12 amends regulation E31A to clarify the due date. Interest is payable if certain benefits are not paid within one month of that date.

Regulation 13 amends regulation F1(11)(a) to comply with the Pensions Act 1995. The change provides that one of the dates by which a transfer value must be paid by the Secretary of State is a date six months after the guarantee date (rather than a date which is 12 months from the date on which application is received by the Secretary of State).

Regulations 15 and 16 are linked to regulation 4, and insert new provisions whereby a teacher’s employer, or in certain cases former employer, may elect to pay all or part of the contribution deficit of a teacher who has made an election under new regulation C1A to pay contributions on a previously higher salary. The contribution deficit means employers' contributions on the difference between the old and new rates of salary, which would otherwise be paid by the teacher himself. Regulation 16 also provides for the relevant payment to be made to the Secretary of State, where an employer has elected to purchase past added years on behalf of a teacher.

Regulation 17 re-enacts with modifications regulation H1 of the 1992 Regulations and provides that in certain cases where a teacher’s salary is reduced the Regulations have effect subject to certain modifications set out in Part II of Schedule 9. The principal change is to extend this provision to apply to certain cases where a teacher leaves employment with one employer and takes up employment with a new employer at a reduced salary.

Regulations 19, 20 and 21 introduce revised actuarial factors relating to the purchase of past added years. The revised factors take account of recent financial, economic and demographic conditions and trends.

Regulation 22 re-instates paragraph 3 of Schedule 7.

Regulations 24 and 25 introduce amendments to Schedule 11 consequential upon the Pensions Act 1995 and the Occupational Pensions Schemes (Transfer Values) Regulations 1996.

Any other amendments not specifically mentioned are minor or consequential.

Regulation 26 provides for a right to opt out of the amendments for a person to whom a benefit is or may become payable, if that person is placed in a worse position than he would be in if the amendments had not been made and the benefit is payable to or in respect of a person who had left employment before the date on which these Regulations come into force or who had died before that date.